Two adjoining Anaheim industrial properties have sold for a combined $65 million, in the largest local sale for the property type this year.
Dallas-based Dalfen Industrial acquired the two buildings totaling 182,800 square feet in a deal that works out to about $356 per square foot. The seller was JPMorgan Chase & Co.
CBRE Group Inc., which had the listing for the property, estimated the replacement cost to be north of $550 per square foot.
The properties, dubbed The Mart, are on a 9.1-acre parcel at 1340-1400 S. State College Blvd. and 2000-2050 E. Winston Road in Anaheim’s Tile Mile, an industrial hub less than 2 miles north from the Honda Center.
Both properties are 100% leased, according to prior marketing materials from CBRE.
“With existing rents 31% below market and only 2.87 years of WALT (weighted average lease term) remaining, this is a significant mark to market opportunity with high renewal probability tenants,” the 2022 listing materials said.
It’s the fifth-priciest industrial sale for Orange County in the past two years.
The acquisition is the first in OC for Dalfen, which has a portfolio topping 50 million square feet in more than 20 states.
Dalfen owns a handful of assets in San Diego, and early this year it entered the Inland Empire market, acquiring a new, 95,922-square-foot logistics building in Moreno Valley.
The company entered the California market in 2021, and has acquired 12 properties in the state since.
“We are eager to acquire more functional and modern buildings as new product delivery tapers off in the near term,” Willis Fries, Dalfen’s market lead for the Inland Empire and Los Angeles, said in a statement.
Low Vacancies, High Rents
The larger building on State College runs some 102,800 square feet with a mix of tenants including Esmer Tile, American Tile & Marble Design and Westminster Teak.
The latter building runs 80,000 square feet with two tenants, Jon-Don and Lunada Bay Corp., according to CoStar Group.
Both properties were built in 1997.
CBRE projected the Class A properties to “profit from the region’s 12% rent growth in 2022 and an additional 31.4% rent growth over the next five years.”
Only 6% of OC’s industrial product is Class A, according to CBRE. Vacancy rates for the sector are hovering around 1% for OC and 0.4% in Anaheim.
Market rents, meanwhile, are in the $2 per-square-foot range; that’s expected to surge to about $2.34 by 2027.