2492 – 2498 S. Tejon St.
Multi-unit Small units from 2,000 to 3,027 sq ft.
10,027 sq ft, (4) units, brick and wood exterior.
- Small unit industrial is a good performing asset in economic downturns.
- Stays fully occupied nearly all of the time due to high demand and low inventory of like product.
- Very few, new small-bay building spaces (0-6,000 sq ft) have been created in the past 10 years.
- The building was purchased with a projected net annualized return of 10.03%.
- Purchased December of 2017 for $910,000 (no leverage utilized)
- The building required $148,000 in capital improvements in order to receive a certificate of occupancy for two of the units:
- New electrical distribution panel, curbs, and wiring to panels
- New roof on 50% of the building
- New shop heaters, heating inside offices, and other significant plumbing
- Ceilings needed to be drywalled in two units
- One unit converted from office to warehouse
- 50% of the leases are up for renewal in 2020.
- We will focus on staggering leases in future years to mitigate tenant turnover at the same time.
- Another risk is tenant credit. We are trying to improve credit for each time a unit becomes available.
OUTLOOK & EXIT
- All work was completed within 1.5 months of purchasing the property.
- Certificate of Occupancies have been awarded and the vacant units have been occupied.
- The property is performing as expected with a forward weighted projected net annualized return of 10.07%.
- If the property was sold after 3 years, the projected net annualized, non-levered return upon disposition would be 11.67%.