TPG Angelo Gordon JV Pays $42M for LA Industrial Asset
The fully leased property is part of one of the nation’s hottest submarkets.
An industrial property in the Chatsworth neighborhood of Los Angeles has traded for $41.5 million. Center Capital Partners, Authentic Capital Group and TPG Angelo Gordon acquired the 153,900-square-foot building from NBP Capital.
The De Soto property previously changed hands in 2017 for $23 million. The asset was fully leased at the time of the current sale by two tenants, including Align Aerospace, whose lease will expire in 2028.
The single-story building, dating from 1983, is on about 6.7 acres at 9401 De Soto Ave. The warehouse features 28- to 31-foot clear heights, 12 dock-high loading positions, six ground-level doors, 21,000 square feet of office space and a fenced, concrete yard.
Buying industrial assets in urban infill markets
The trio of buyers are all active CRE investors. Center Capital Partners is a private equity real estate firm, while Authentic Capital Group is a private real estate investment firm. TPG is a global alternative asset management firm, founded in San Francisco in 1992, with $224 billion of assets under management.
The deal is part of a larger initiative by Center Capital Partners and Authentic Capital Group to acquire a portfolio of core-plus to value-add industrial assets in urban infill markets.
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The rapid rise in interest rates over the past two years has put upward pressure on stabilized yields and driven down valuations, Center Capital Partners Vice President Blake Bowie said in prepared remarks. He further noted that the current environment means an opportunity to acquire assets at a significant discount to replacement cost, with 9401 De Soto, which is in the San Fernando Valley, as a good example.
The San Fernando Valley is one of the hottest industrial submarkets nationwide for leasing activity, according to CBRE, though it experienced negative absorption of about 469,000 square feet in the first quarter of this year. Even so, the valley’s industrial vacancy rate is a tight 1.4 percent, and with only about 523,000 square feet under construction, vacancy will probably remain low.
Industrial still king
CBRE National Partners’ Michael Longo and Barbara Perrier, as well as Bennett Robinson, represented the buyers in the deal. Longo noted that local industrial valuations are down, but hardly out.
“While values have adjusted from their highs, industrial is still the preferred product and continues to perform,” Longo told Commercial Property Executive.
Long gone are the 3 percent caps of 2022, he said, but vacancy remains low, demand is strong and rents continue to grow.
“There are few sellers in today’s market, but when available, high-quality industrial buildings in good infill locations are holding their values and getting strong investor interest,” Longo said.
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