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9/05/18
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Walnut-Creek based Nearon Enterprises has made its first entry into the Sacramento region, recently acquiring a fully leased industrial portfolio totaling 517.8k sf for $34 mil, or $66/sf. The seller was Massie & Co, a real estate development firm in Sacramento and Reno, NV.
The sale included the three buildings located at 6300 S. Watt Ave, 8360 Elder Creek Rd and 8920 43rd Ave in Power Inn, Sacramento’s largest industrial submarket. They are close to Highways 50 and 99, with future growth anticipated in areas south and east of this location.
The buildings, which are fully leased to American Building Supply Inc (ABS), a wholly owned subsidiary of Jeld Wen, are situated on approximately 29.61 acres and were all constructed in the late 1980s and early 1990s. The buildings offer flexibility and are provide a still functional design by today’s standards.
Kevin Partington, Matt Cologna, Bryce MacDonald, David Nicholson, Ron Thomas, Bruce Hohenhaus, Chris Schwarze, Adam Lasoff, Seth Siegel, Steven Hermann, and Eric Fox with Cushman & Wakefield represented the seller in the transaction.
“The sale consisted of three well maintained buildings fully leased to a longstanding single tenant which still has several years of term remaining on their lease. This long tenure, coupled with in-place rents approximately 30% below market standard will provide stable cash flow and also a value-add component at renewal,” noted Partington. “ABS, which has multiple locations throughout the country, considers Sacramento their corporate headquarters. Their continued growth in the area seems to represent their commitment to the region and speaks to the strategic location of the properties.”
According to Cushman & Wakefield’s latest industrial market report, Power Inn submarket vacancy was 3.7% at midyear 2018, while overall vacancy in Sacramento hit a new market low of 4.4%. Strong leasing activity in the area has driven lease rates upward while limited supply throughout the region has made available space scarce. Power Inn has maintained relevancy as one of the top five submarkets that companies typically consider when locating to the region.
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