IDS Secures $69M Loan for Los Angeles Portfolio

Walnut Business Park. Image courtesy of JLL Capital Markets

IDS Real Estate Group has received $69.1 million in post-close acquisition financing from MetLife Investment Management for Walnut Business Park, a 33-building light industrial portfolio totaling 334,824 square feet in Walnut, Calif., in Los Angeles County.

JLL Capital Markets represented the borrower in securing the financing. The JLL Capital Markets Debt Advisory team was led by Senior Director Matt Stewart and Analyst Chris Jaffe.

IDS, a Los Angeles-based privately held real estate owner, operator, developer and asset manager, acquired Walnut Business Park, from Vogel Properties for approximately $109 million in late 2021. The acquisition of the fully leased, multi-tenant business park was reported in early January 2022.

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Located on 22.6 acres at the northeast corner of Valley Boulevard and South Lemon Avenue in the desirable infill San Gabriel Valley submarket. Walnut Business Park is adjacent to CA-60 and the CA-60/CA-57 interchange, with additional connectivity to Interstates 10 and 5.

Stewart said in a prepared statement demand for core industrial real estate remains strong despite macro headwinds. He said the JLL team worked with MetLife to structure a highly bespoke financing solution that achieved all the sponsor’s objectives. Details about the financing were not disclosed.

The industrial market remains incredibly tight, with fourth-quarter 2022 total vacancy rates for manufacturing as well as distribution and warehouse properties at 1.4 percent for both the San Gabriel Valley submarket and the overall Los Angeles market, according to a JLL Industrial Insight report. In San Gabriel Valley, the vacancy rate for only warehouse and distribution properties was at 1.6 percent, while for the Los Angeles market, the rate was 1.5 percent.

JLL also reported the industrial construction pipeline grew by 1.6 million square feet in the fourth quarter, with 80 percent of the development taking place in the San Gabriel and South Bay submarkets, where there are more options to build at scale. JLL notes demand for those submarkets remains high because of their proximity to the ports and entry into the Inland Empire.

IDS industrial moves

In September, IDS secured $124 million in post-close acquisition financing for a 1.2 million-square-foot cold storage facility at 14950 Meridian Parkway in Riverside, Calif., where United Natural Foods Inc. is the sole tenant. JLL Capital Markets arranged the deal for IDS, securing the 10-year fixed-rate loan from Northwestern Mutual. An IDS affiliate had acquired the property in February 2022 for $225 million.

IDS acquired the Walnut Business Park in late 2021 soon after a firm affiliate sold Viva Logistics Center II, a 547,000-square-foot, Class A logistics center in southern San Diego to EastGroup Properties for $135 million. The 29-acre industrial park with four buildings was purchased by IDS in 2018 from AFL-CIO Building Investment Trust for $67.5 million.