Case Studies / How to value specialized properties

How to value specialized properties

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Our Team was hired to market and facilitate the sale of a single tenant net leased investment. The property included a free standing 40,000 SF concrete tilt-up situated on 80,542 SF of land located in Anaheim, CA.
COnsideration
$7M
Represented
Seller
Transaction
Sale
Address
1000 Cerritos Avenue, Anaheim, CA

Challenge

The building had been converted into an ice-hockey center. This included removing portions of the concrete slab and installing two ice-rinks. Further, the columns had to be removed allowing room for the installation of the rinks, which resulted in new structural supports that reduced the ceiling height in certain areas. Lastly, the loading dock area was now fully enclosed eliminating the dock-hi loading positions.

Solution

Over the years our team has aligned itself with venders, contractors and consultants specializing in industrial properties. We were able to leverage our relationships to understand the cost involved to restore this property. This included the removal of the ice-rinks and replacement of the warehouse floor. Once the restoration budget was established, we could better assess the impact it would have on the capitalization rate an investor would expect for this unique / specialized opportunity.

Outcome

We were able to secure a reputable investment group to purchase the property. The property’s gross potential income was assessed by analyzing what other comparable industrial warehouse properties were leasing for in the immediate area. After deducting the operating expenses and applying a capitalization rate to establish a fair market value is when the negotiations began. The Buyer and Seller could both calculate the time and cost required to retore the building and a secure a traditional industrial use for the property. A sale price was ultimately agreed upon followed by a successful close.

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