$59M office park sale sets record for region
A 1.2 million-square-foot office park in Camarillo has changed hands, marking the largest industrial property deal in the region’s history.
The $59.1 million sale of the Mission Oaks Corporate Center to Los Angeles-based Rexford Industrial also edges out the 2002 sale of Oxnard’s 13-building Topa Tower financial plaza, which was purchased by the late Los Angeles investor John Anderson for a reported $58 million.
Rexford co-founder and Senior Managing Partner Howard Schwimmer told the Business Times that his firm, which focuses entirely on Southern California industrial properties, saw significant long-term upside potential in the three-building Mission Oaks center.
“It’s a market we own property in and are very familiar with, and this was just a fantastic opportunity in that it had stable long-term income in place,” Schwimmer said.
The two tenants at the Mission Oaks Boulevard property are Deckers Outdoor Corp., the Goleta-based footwear firm, which leases two of the buildings for a total of 732,606 square feet of warehouse space, and Technicolor, which leases 455,709 square feet.
The property is 74 percent occupied.
Schwimmer said Rexford has an approximately $8 million budget dedicated to sprucing up the 300,000 square feet of vacant space, which it plans divide into smaller suites.
While the Camarillo deal was typical of Rexford’s acquisition strategy — buying underperforming properties, remodeling and managing them — this deal was on the larger end of its spectrum, Schwimmer said.
A bank was involved with the deal negotiations between the seller, he said, although the loan was performing. He declined to elaborate on the specifics.
Commercial real estate brokers Barbara Emmons, Darla Longo, Mike Kendall, Doug Shaw, Paul Farry and Jim Meaney of CBRE announced the sale after negotiating the deal for the seller. The previous owner was Sandstone Properties, records show.
Farry told the Business Times the size of the transaction validates the return of the region’s investment market. Many investors with access to capital are jumping in early, sensing that the region’s commercial real estate markets have bottomed out, he said.
“Investors are looking at regional conditional improvement in market,” he said. “They’re looking at the whole Southern California region. It seems like the larger properties are beginning to trade more.”
The Mission Oaks Corporate Center received five to six legitimate offers, Farry said.
But Bill Watkins, the chief economist at the Center for Economic Research and Forecasting at California Lutheran University in Thousand Oaks, was skeptical. “It certainly is good to see the sale, and it will probably put some more resources than the previous group was willing to put into the market,” he said.
But the sale doesn’t necessarily confirm a market recovery, he said, and was likely a one-time chance for an opportunistic buyer. “This sounds like an under-leased project that’s being sold … People who do this usually come in, they tend to buy at a good price and then invest in the property and can do well.”
Vacancy rates in the county’s industrial market remain high, he said, and are expected to stay that way for several years.
Ventura County’s industrial property market overall has a 9 percent availability rate, higher than Los Angeles County’s 8 percent but below the 10-plus percent in the Inland Empire, according to a second-quarter market report by Mike Foxworthy Jr. and George Eales of Daum Commercial Real Estate Services.
The report noted that Camarilllo’s availability rate has improved by 10 percent since 2011 to 6.6 percent: “Camarillo has seen a remarkable recovery since the beginning of the recession and their availability rate is now competitive with all other markets in the West County.”
The Camarillo center is the ninth-largest office park in the Tri-Counties and the third-largest in the Ventura-Oxnard-Camarillo corridor, according to the Business Times’ annual survey, which ranks the parks by square footage.