Inside the Deal
A Pivotal Moment in the Industrial Real Estate Market
November 8, 2021 4 Minute Watch
A Unique OpportunityCBRE was approached in 2020 to consult on the potential sale of an industrial warehouse in Whittier, California. The client had already received an off-market offer, but CBRE advised them to instead bring the property to market to capitalize on the incredibly strong investor appetite for industrial assets in Southern California.
A Pandemic ChallengeWith COVID-19 restrictions in place, CBRE’s teams had to pitch the deal virtually and market the property with video tours. This method proved to be challenging—especially since CBRE put the property on the market in July 2020, right at the height of the pandemic in Southern California.
Strong Investor InterestDrawing on a wide number of investor contacts, CBRE attracted 14 initial offers, indicating a high degree of interest among investors. With seven total rounds of deeply competitive bidding, CBRE used its deep market expertise to advise the client throughout the process and help secure the best deal possible for them. E-commerce and logistics companies were driving strong demand for industrial properties, and Perrier’s team provided data-driven insights to potential buyers and their client on these evolving market conditions.
Pricing that Exceeded ExpectationsThe final round of bidding resulted in a highly competitive sealed bid that CBRE delivered directly to the owner. It was $50 million over the initial, unsolicited offer the owner had received and exceeded all expectations for the property. With a record-breaking 2.8 percent initial cap rate that stabilized at 3.6 percent over time, the accepted offer came in at $296.6 million, which equated to more than $300 per square foot. CBRE proved itself a committed and consultative partner, helping the client secure a much better deal by taking the property to the market and identifying interested investors.
The Ongoing Rise of Industrial Real EstateInvestor demand for industrial & logistics assets has continued unabated throughout the pandemic due to the explosive growth of e-commerce. CBRE has been at the forefront, leveraging the depth and breadth of our resources and expertise to help investors capitalize on opportunities.
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