Von Karman Industrial Center is an industrial building comprised of 62,587 square feet, located at 16912 Von Karman, Irvine, California. The original strategy for this building was to acquire, rehab, subdivide into two separate condo parcels, and lease up for investment sale. Prior to taking title, an unsolicited offer was submitted by White Road, LLC to purchase the building at premium pricing.
We were ready to accept the offer and arbitrage its investment. However, the seller halted the purchase when they discovered they could not retire their loan. In the face of a seller default and ultimately litigation, we instead chose to work with the Seller to come up with a creative solution to accommodate all parties. We negotiated a delayed closing with the seller until their loan’s lockout expired. They also convinced the seller to lease the space to White Road so the end-user could occupy the property while the sale was being sorted out. During the lockout period and before taking ownership, we continued to pursue the original strategy of subdividing and rehabbing the property, completing all the necessary legal work prior to taking title.
We demonstrated our remarkable relationship with Wells Fargo through this convoluted transaction. Despite the setbacks, Wells Fargo remained committed to first trust deed financing. After approximately four months, the lockout period expired and we acquired the property. Upon recording of the purchase, final steps were taken to complete the sale to White Road. The efforts to overcome the challenges were rewarded by a profit of $2.3 million, an amount equal to 10 times the original investment.
- Ability to reposition an asset in a highly sought-after location
- Deploy a combination of legal, structural, and cosmetic value-add strategies
- Quickly identified an end-user at premium pricing before taking ownership
- Worked with the Seller and the Buyer to come up with a solution agreeable to all parties
- Continued with capital improvements before taking ownership
- Demonstrated a remarkable relationship with Wells Fargo by keeping them interested in a small and confusing transaction