CBRE Facilitates Fully Leased Industrial Sale in North Orange County

CBRE negotiated the sale of a fully-leased industrial offering in North Orange County, one of Southern California’s most desired locations. Located at 350 Ranger Avenue in Brea, the property sold for $17.5M and spans 138,710 square feet on 6.36 acres of land.

Anthony DeLorenzo, Gary Stache, Bryan Johnson and Nick Williams of CBRE represented the seller, Saunders Property Management. Los Angeles-based Vectra Management Group acquired the property for one of its sponsored real estate partnerships.

“Orange County was ranked the top investment market in the country in 2021 among investors, reflecting the county’s strong absorption, low vacancy and sustained rent growth,” said Mr. DeLorenzo, a Vice Chairman with CBRE. “With strong employment and an attractive quality of life, the area is a highly sought-after gateway market.”

Having one of the tightest industrial markets in the country, with a vacancy of 1.1 percent in the fourth quarter of 2021 – and 0.7 percent vacancy in North Orange County – investors and tenants entering the Orange County industrial market face an incredible challenge, with limited options despite growing demand.

This prime industrial property provides ease of ownership with triple net leases and a protected income stream with annual increases. During the 10-year hold period, in-place rents are projected to grow by 268 percent, while existing rollovers are well-staggered and exceed no more than 33 percent per year. Additionally, current in-place rents average 45.2 percent below market, with the average weighted remaining lease term totaling 3.4 years.

“This means new ownership is protected by controlled rollover exposures while enjoying durable cash flow during the investment period,” said Mr. Stache, an Executive Vice President with CBRE. “Accelerated industrial rent growth in Orange County, working alongside strong demand, will significantly lift yields with upcoming rollovers.”

The remaining term of the current ground lease – which expires July 31, 2056 – provides a significant investment runway while allowing new ownership the option to depreciate the entire property.

The retail offering surrounding 350 Ranger Ave. is abundant, located near the Brea Mall, Village at La Floresta, Imperial Plaza, Brea Plaza, Brea Union Plaza, and Imperial East Shopping Center. The city of Brea, which sits at the northern edge of Orange County, is in a central location well-served by a freeway network including the 57 and 91 freeways bordering Los Angeles and the Inland Empire. This regional span includes more than 13 million people and a $1 trillion economy, providing an inherent value that is immeasurable.