bay boulevard

Core-plus Case Study (sold)

Bay Boulevard

The Opportunity
  • In Q1 2013 CIRE acquired a 100% leased multi-tenant industrial flex asset built in 2003

  • The Property was purchased off-market direct from seller at an above market cap rate, representing a significant discount to comparable sales in San Diego

  • Excellent location a few hundred yards from the ocean and situated immediately west of the I-5 Freeway with direct on-ramp and off-ramp access adjacent to the site

  • The Property provides strong current cash flow and the Company plans to hold the asset long-term to capitalize on the quality of the location and the potential for strong long-term appreciation

Strategy
  • Long term (10 year), low interest rate assumable debt was placed on the project allowing security for a long-term hold and flexibility for alternative exit strategies

  • Complete a complete audit and overhaul of property level operations to maximize efficiencies and reduce costs

  • The Property is condo mapped for 10 units, which provides a flexible exit strategy and potential to maximize value by selling individual units to owner-users

  • The project is comprised of Five (5) tenants within ten (10) suites, allowing for expansion and contraction flexibility with minimal future tenant improvement costs

  • Significant master planned development slated for land directly adjacent to the asset will provide potential for strong long-term appreciation

Execution/Results
  • Within a relatively short hold period, CIRE executed a multi-faceted value-add strategy that resulted in significant enhancement of the quality and quantity of underlying cash flow at the property.

  • Realized an aggregate project level return on equity of 81% over a 23 month hold period, representing a return of investment of approximately 40.5% per year.

 
Property Description

 

Property Type:
Multi-tenant Industrial

Sub-Market:
Chula Vista, CA

Number of Bldgs:
One(1)

SF/Acres:
31,302 SF/1.95 acres

Year Built: 2003

Occupancy at Disposition: 100%