COMMERCIAL REAL ESTATE TRANSACTION ALERT
MCA Realty, a full-service real estate investment and management company based in Orange County, California, has recently announced the sale of Diaz Commerce Center, a 131,577 square-foot industrial asset in Temecula, California. The industrial property was sold to a local investor for $14 million.
“There continues to be strong demand for well located, quality industrial assets across the Inland Empire,” explains Tyler Mattox, Principal at MCA Realty. “We have been involved in the market early on and this recent sale is demonstrative of our ability to find and acquire undervalued properties and bring them full cycle.”
Mattox explains that it further demonstrates an ability to get deals over the finish line in the current environment.
“Industrial properties, including multi-tenant industrial, is an asset class that has continued to perform despite the pandemic,” he explains. “There has been a continued shift towards more last mile distribution and rising e-commerce use and this trend has been exacerbated by the current environment, making industrial properties attractive to many investors.”
MCA Realty initially acquired the property, which consists of two separate buildings, in September 2018 for $10 million.
“We were able to lease the remaining vacancy in the property during escrow when we first acquired it, and significantly shorten our expected hold period.” says Mattox. “This increased the value of the asset more rapidly which allowed us to sell it for a reasonable profit two years later.”
Mattox also notes that at the time of sale the existing tenant’s lease was up for extension. The tenant opted not to exercise its below market option, which created an additional opportunity for the buyer.
During ownership, MCA implemented a series of improvements including the addition of LED lighting, updated asphalt, and increased the parking. In addition to these improvements, the firm also added additional fenced yard space, which created better functionality for the building.
“The upgrades to the property combined with growing demand in the region resulted in strong pricing,” says Mattox. “This allowed us to achieve a good return for our capital partners. We plan to continue to invest in properties throughout the western region and execute on our strategy.”
The property is located at 27711 Diaz Road in Temecula, California. Scott Stewart at Lee & Associates represented MCA as the seller. Barret Woods at Lee & Associates represented the buyer.