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Through its best-in-sector sourcing, CapRock acquired a 309,535 SF industrial building at 800 Iowa in Riverside, California that is 100% leased to Rust-Oleum, a wholly owned subsidiary of RPM International (NYSE: RPM) – a Fortune 1000 company – with a market capitalization of more than $6 billion. As part of the acquisition, CapRock also acquired the adjacent +/- 100,000 SF Class ‘C’ industrial building on 13.60 acres that had a lease expiring in less than one year from acquisition. With 25% of the square footage leased short-term on a Class ‘C’ building with low FAR, the property did not fit the investment parameters for core buyers and, similarly, with 75% of the project leased to a Fortune 1000 subsidiary. most value add buyers failed to look beneath the surface to see the upside.
Given our firm’s intimate understanding of the Inland Empire and the Hunter Park submarket in particular, CapRock created a business plan that unlocked the property’ s intrinsic value. Large land parcels are rare in Hunter Park and highly coveted by high quality users. In addition, the site has three active rail spurs that are shared between the Class ‘C’ building and the Rust -Oleum building, as well as beneficial power rates since the City of Riverside has its own utility company – both of which are significant amenities. Rust-Oleum was financially committed to its building as evidenced by its approximate $2,000,000 of its own capital to customize the facility as its primary west coast distribution center. With the market experiencing rising lease rates amidst declining vacancies, CapRock was confident that the 13.60 acre site with the +/- 100,000 SF building would attract significant interest from high quality tenants. Shortly after acquiring the entire +/- 410,000 SF portfolio, CapRock successfully negotiated a Purchase and Sale Agreement on the 13.60 acre property with a multi-national company that needed the excess land and the active rail spurs, and was attracted to the low utility rates given their heavy power use. With its basis significantly paid down with the sale of the Class ‘C’ building and associated land sale, CapRock was able to unlock the property’s true value and now continues to enjoy significant cash flow on 800 Iowa, which is secured by a credit tenant.
- Premier master-planned industrial submarket
- 75% of property leased to a subsidiary of a Fortune 1000 Company on long-term lease
- Acquired below replacement cost
- Minutes from Interstate 215, 60 Freeway & 91 Freeway Interchange
- Corporate Tenants include: Wal-Mart (NYSE: WMT), Grainger (NYSE: GWW), Dr. Pepper Snapple Group, PODS, Bourns Inc.
- Corporate Owners include: DCT Industrial (NYSE: DCT), Prologis (NYSE: PLD), USAA Realty, Alere Property Group, Cornerstone Advisers, LBA Realty, Koll.