Core Industrial Portfolio

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Background & Challenges

Westcore assembled a 3.2M SF portfolio of industrial buildings in the Western U.S. over a four year period in 12 separate transactions ranging in price from $8M to $25M. Many of these buildings were vacant at time of acquisition, with a weighted average overall occupancy of 47%. Westcore selected each of these buildings due to their strong, or potentially strong, functionality and location. 

Actions

Westcore went to work on stabilizing each asset. In multiple cases, a building was leased during due diligence or immediately after acquisition. In other cases, the project took multiple years. The standard operating procedure included:

  • Cost effective improvements that are highly visible to tenants, typically including paint, asphalt and signage. In a number of cases, more extensive repositioning efforts were required to address major functional challenges. Two buildings were demolished and redeveloped as a single Class A industrial building.
  • Proactive “make lease ready” of all vacant spaces to make them move-in ready.
  • Creating a “show room” environment for each vacant space.
  • Extensive broker outreach promoting each building and vacancy.

Results

With an average hold period of 28 months, Westcore was able to drive occupancy from 47% to 96%. Through actively tracking capital market activity, Westcore was able to recognize the strong demand for larger, stabilized portfolios. This ultimately resulted in a sale of the entire portfolio to a single buyer at 30% more than Westcore’s total costs in the portfolio.

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