Background & Challenges
Westcore acquired this mixed-use, 42 acre site in mid-2012. Although fully marketed by one of the strongest brokerage teams in the Western U.S., the project lacked institutional interest due to its mixed use nature. At time of acquisition, this project (originally built as a grocery distribution and processing site), consisted of:
- A 215,000 SF distribution building built in 1992 with two years of lease term remaining.
- A 255,000 SF vacant industrial building built in 1972 with significant functional challenges.
- A 56,000 SF Class C office building, leased at rents significantly over market.
- A 147,000 SF spice distribution manufacturing building.
Westcore was able to see beyond the challenges of the three older buildings and the mixed-use nature of the project. Westcore ran parallel paths to address the two main functional issues:
- Functionally Challenged Industrial Building: Completely reconfigured warehouse storefront and pedestrian access to entirely change look and feel of building. Additional upgrades included painting, monument signage, landscaping, interior reconfiguration, loading dock widening and door packages. Total costs were $5 psf.
- Office & Spice Buildings: Negotiated lease buyout with existing office tenant paying above market rent. Demolished low coverage office and spice manufacturing buildings to build new 300,000 SF warehouse building on a speculative basis.
Westcore was confident that these actions would yield successful results due to its deep market knowledge developed over a 10 year period.
The results exceeded Westcore’s expectations.
- The transformed industrial building was sold to a user within 15 months of acquisition.
- The 300,000 SF speculative development was pre-leased to Tesla Motors on a long-term lease prior to breaking ground on construction.
- The lease at the existing 215,000 SF distribution building was renewed on a long-term basis at rents significantly above original underwriting.
This serves as an example of how Westcore can see beyond what a project is to what a project can be. The project has since been sold to a large, institutional investor.