RECENT CASE STUDIES
Northpoint Office Towers: Modesto, CA
Property: Northpoint Office Towers is an 86,015 square foot Class A office property well-located at the north end of the Modesto submarket. The property was acquired for $10.35 million ($120/sf) representing a 9.38% cap rate on in-place net income. Highly visible on Highway 99 to 123,000 cars per day, the office complex features underground parking, abundant surface parking and is well-situated to serve both Stanislaus and San Joaquin counties.
Strategy: The property was purchased at a 9.38% cap rate on existing net income, with only 59% of the property occupied. The overall Class A office market is incredibly tight (<5% vacancy). We currently have a negotiated lease for 28% of the vacant space and additional interest in over half of the remaining vacant space.
Century Center: Modesto, CA
Property: Century Center is a 214,772 square foot retail center on 17.86 acres, well-located on the major corridor of east Modesto (Oakdale Rd.), in a higher income neighborhood. The Property was acquired for a cost basis of $13,200,000 ($61 per square foot) representing an 11.74% cap rate on in-place NOI. This cost basis is a 66% discount to the property’s 2006 appraised value of $39,000,000.
Strategy: Due to it’s location and size, Century Center was a regional draw for retail until losing its two anchor tenants a decade ago. Since that time the center has been poorly managed and is in need of fresh reinvestment. The property sits in a protected trade area and benefits from a strong brand. Leasing strategy is focused on lifestyle and restaurant/experiential retail as well as medical uses. Renovation includes a substantial façade update and parking lot, lighting, and monument signage upgrades.
Sylvan Square: Modesto, CA
Property: Sylvan Square is a 79,962 square foot, stabilized, fully renovated, senior-focused, post-Amazon retail center in a well-located neighborhood of Modesto, California. The center consists of 47% government senior services, 24% restaurants, 16% medical, and 8% health & beauty services and does not contain a single shopping cart.
Strategy: The property was acquired below market value and well below replacement cost (9.40% capitalization rate and $161 per square foot) with minimal capital expenditure required. Tenants are on long term leases and will remain for the long term.
Post Foods Plant: Modesto, CA
Property: 901 E. Whitmore Ave. is a 282,000 square foot, six story food processing plant located on 76.90 acres. The property was formerly a Post Foods cereal plant producing Grape Nuts, Honey Bunches of Oats, Kool Aid, and other products for the West Coast.
Strategy: The property was purchased from Post Foods with all processing equipment remaining in the plant (spread over 150,000 square feet of production floor in six floors. The equipment was auctioned off and removed. The parcel lines were adjusted so that the production facility and the developable industrial land were separated. Each property was sold to a separate buyer.