We acquire and actively manage light industrial, multi-tenant business parks in the western United States, a niche asset class that offers the following advantage over other real estate products:
- Large tenant bases and short lease terms smooth properties’ rent rollover profiles and consequently net operating incomes
- Tenants for business parks come from many different industries, limiting property owners’ exposure to secular downturns in any one vertical
- Faster lease turnover means quicker value capture in rising markets
- Simple concrete tilt-up construction styles and universal layouts lead to lower tenant improvement costs and capital expenditures
These attributes combine to mitigate risks and allow expert owner/operators multiple value-creation levers even in uncertain economic environments.
Additionally, a large proportion of these assets sit squarely in the middle market. Our target transaction size of $10 million to $25 million tends to be too large for individual investors and too small for institutional investors, limiting the scope and intensity of competition for deals.
With current pricing for these assets well below market peak and rents on an upswing, fundamentals for multi-tenant business parks indicate favorably toward substantial growth in the near- and medium-term future.