Buyer Makes First Entry into Sacramento with Acquisition in Top 5 Power Inn Submarket
SACRAMENTO, Calif. (September 4, 2018) – Walnut-Creek based Nearon Enterprises has made its first entry into the Sacramento region, recently acquiring a fully leased industrial portfolio totaling 517,767 square feet (sf) for $34 million. 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., which are fully leased to American Building Supply, Inc. (ABS), a wholly owned subsidiary of Jeld Wen.
Cushman & Wakefield’s 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 Cushman & Wakefield team was strategically drawn from brokers in Sacramento providing strong local knowledge and sales/leasing expertise together with a veteran capital markets group from offices in the Bay Area bringing deep investment experience.
Mr. Partington, Executive Director, said, “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.” He added, “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. I believe Nearon really saw the current and future value of these buildings which is why they selected them as their first regional acquisition.”
Well located in Power Inn, Sacramento’s largest industrial submarket, the properties are situated on approximately 29.61 acres and were all constructed in the late 1980s and early 1990s. They benefit from their flexibility and still functional design by today’s standards, proximity to Highway 50 and 99, and future growth anticipated in areas south and east of this location. Mr. Partington noted, “With limited entitled land options and skyrocketing construction costs, the properties are pretty well insulated from downside risk.”
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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Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.