written by
Natalie Baylon

Intersection is pleased to announce the sale of a fully leased and stabilized internal investment fund property managed by Intersection

Experiential Poway Retail Center Closes for $13.5 M

Senior Directors, Kyle Clark, and Dan McCarthy along with Senior Associate Alec Spencer, represented the seller in the sale of the North County retail center, Old Poway Village at 14005-14055 Midland Road, Poway CA. The 35,191 square-foot award-winning center consists of a selection of carefully curated retail tenants.

The property was sold as a fully leased and stabilized investment. After acquiring the property in 2017, Intersection established a new vision for the center that focused on building a destination lifestyle center for the Poway Community. To accomplish this, Intersection replaced several non-performing tenants with new, carefully curated businesses to create a retail experience conducive to the family neighborhood of Poway and surrounding North County residents.

Artisan Food and Beverage tenants The Hop Stop, Smokin’ J’s, and Mission Cellars anchor the center, and they are complemented with users such as the Bark and Collar, Poway Music Academy, Poway Pilates, and a lineup of other local tenants that support a unique dining and shopping experience.

“This has been a true passion play for Intersection.” Said Mark Hoekstra, Managing Director of Intersection. “I grew up in this neighborhood and always felt that this center could become something special. It has been an amazing journey seeing this property transform”.

The property was sold to a 1031 Exchange Buyer who closed within 45 days of opening escrow. “We positioned this asset to sell with clean triple net leases, good lease term on the rent roll, and have maintained the property impeccably.”, shared broker Kyle Clark “The Escrow was smooth with no surprises.”

The buyer plans to hold the asset long-term drawing upon the stabilized cash flow. “This property performed very well during the pandemic.” Stated broker Dan McCarthy. “Our tenant base was resilient, and the many outdoor areas benefited our food and beverage tenants significantly.”

To learn more about this deal please reach out to Kyle Clark at [email protected] or Dan McCarthy at [email protected]

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at [email protected] 

written by
Anton Myskiw

Intersection Makes First Nevada Acquisition Adding to a Diverse Portfolio of Value-Add Properties in Attractive Growth Markets

LAS VEGAS, Nevada. – Intersection officially announced the close of escrow on a 100% occupied 18-unit flex industrial property in Las Vegas, Nevada for $4,525,000. This property is the seventh acquisition made by the company crossing $70M of total capitalization.

The property, located at 4355 -4375 W. Reno Ave., Las Vegas, NV 92105 is a two-building project in West Las Vegas and was purchased in an off-market transaction from a local ownership group. The deal was sourced off-market through a local broker Erik Sexton of NAI Excel Las Vegas.

“This was a property that needed institutional quality management and an entrepreneurial strategy. Intersection recognized the value and moved quickly.”

Said Sexton. Intersection Senior Analyst Anton Myskiw added, “We have been working diligently to find industrial/flex assets in this market. We’ve already completed 3 new leases and will execute a value-add plan that improves operations as well as the curb appeal of the property.”

The asset is currently 100% leased by a wide cast of both local and regional tenants, with 72% of the building’s occupancy rolling in the next 12 months. Las Vegas is an attractive industrial growth market, given its positioning as a centrally located logistics hub for the Western region of the states. With 8.5M SF of industrial space under construction in the second quarter of 2021- Intersection is confident this property is a prime candidate to attract auxiliary/complementary users servicing the larger projects-general contractors, material vendors, and other development-focused tenants.

To learn more about this transaction or to inquire about how to invest in a portfolio property please contact Senior Analyst Anton Myskiw at [email protected]

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at [email protected] 

written by
Dan Leon & Anton Myskiw

Research shows a significant pipeline of industrial demand, can we THINK™ like supply chain managers to predict where it will go?

 

Our team hopes everybody is staying safe and healthy during these unprecedented times. 5 months ago, California and our office went into a state of lockdown. Businesses temporarily shut their doors, some fully closing in consequence. The state of the economy and real estate sector shifted overnight. The industry collectively held their breath in anticipation of what was to come.

Friday, March 18th, we were both new to the functionality of working-from-home. We sat on a Zoom call that morning discussing the market implications, whether it was derived from Peter Linneman’s Webinar or general market sentiment. The bottom-line from our discussion was that our firm needed to take a proactive approach to recent events and that a refresh in our investment strategy was necessary. Through significant macro & microeconomic research over the course of the next two weeks, we arrived at a high-level strategic concept of pursuing logistics-based industrial assets. Once we had a foundation, we needed to piece together support around this idea.

Two primary drivers reinforced our reflections: the rebirth of domestic production (offshoring to onshoring manufacturing) and the surge of e-commerce.

Over the past 2 years, retail e-commerce sales, as a percentage of total retail sales, have increased by 500 bps. The volume of those purchasing staple and discretionary items at the touch of a button has only increased from the onset of the virus, with many market experts believing in an irreversible shift from traditional brick-and-mortar sale. The previous, intertwined with the growing argument for domestic manufacturing, invokes the need for logistics-based assets in the near future. The fact that the opportunity cost margin of offshoring production of final goods is shrinking, due to on-going trade discussions/uncertainty & increasing labor costs overseas, supports the prior. Our vision encapsulates these market shifts, in our pursuit of suburban distribution centers (best utilized for same-day delivery), city-center distribution centers (1-2-day delivery), and manufacturing facilities.

As a result of this accelerated e-commerce adoption, the increased inventory levels required by retailers could generate square footage demand for logistics-based industrial equivalent to the total supply of industrial assets in the Inland Empire. Now that we have our rationale behind the investment, where does the demand go, and how do we intend to capture it? That’s where the proprietary THINK™  process came into play. Our team developed a quantitative site selection formula that incorporates the use of multivariable regression analysis to find markets that are best positioned to serve future logistics operations.

In effect, we had to understand what drives the logistics industry, where supply chains would thrive, and ultimately, we had to THINK™ like a supply chain manager.

If you have any interest in learning more about the acquisition & financial criterion within our 3rd offering, please reach out to the experts at Intersection.

written by
Dan Leon

The Second Acquisition in a Portfolio Delivering Strong Cash Flow for Investors

CARLSBAD, Calif. – San Diego based commercial real estate management and investment advisory firm Intersection announced the closing of escrow on La Place Court in Carlsbad on Feb. 12, 2020.  The office property is the second procured by the company for the Intersection Diversified Value Fund (IDVF), which provides investors with a portfolio of properties that have in-place cash flow and high potential for appreciation.

La Place Court offers 81,965 square feet of office space on a 4.58-acre campus with two office buildings.  Historically, the property has maintained a high occupancy, and as of closing, 90% of the property is leased.

Intersection acquired La Place Court from Swift Real Estate Partners, represented by Louay Alsadek, for approximately $15.8 million.  Financing was completed by CBRE Capital Markets team Bill Chiles and Scott Peterson.

La Place Court is the second property in the IDVF, which is targeted to acquire $60 million in properties with approximately $25 million in equity according to Intersection Director of Acquisitions Dan Leon.  The fund’s other property is Oberlin Court in Sorrento Mesa, which was acquired in May 2019.

“We feel that the risk adjusted returns for this product type are solid, especially given the continued strength of the Carlsbad submarket as indicated by increasing tenant demand from the technology sector, improving workforce talent, and strong demographics,” Leon said.

With this acquisition, Intersection officially plants their flag in Carlsbad, with plans to be a tenant of La Place Court providing on site brokerage and management services.

“Having ownership on site enhances the value of the property for investors,” said Intersection Senior Director Henry Zahner, who represented Intersection in the sale.

“By having a presence at La Place Court, we’ll be in a unique position to familiarize ourselves with both the property and its tenants,” said Zahner.  “Furthermore, we will gain valuable insights in leasing remaining space.”

Leon added, “Being on site is all about the delivery of best-in-class service.  It means being there for our tenants.” 

Quality of service is a hallmark for Intersection, which is led by Rocco Cortese and Mark Hoekstra.  With more than 60 years of experience in the real estate industry, Cortese and Hoekstra have built a customer-focused team that is providing investment, brokerage, and management Concierge services in the commercial real estate industry.

With this focus in mind, Intersection plans to modernize the property by integrating a seamless connectivity between indoor and outdoor working environments.  Leon says this will create an innovative atmosphere at La Place Court, attracting a cohesive tenant mix that lays the groundwork for collaborative opportunities among tenants.

La Place Court promises to be a truly unique work setting that already offers tenants convenience and high-end amenities.  Located in the prestigious Carlsbad Research Center, the facility boasts exceptional access to Interstate 5 and Highway 78.  With the McClellan-Palomar Airport less than one mile away and being centrally located between San Diego and Orange County, the property provides an ideal hub for doing business in Southern California.

“By acquiring a high-end asset at below replacement cost, we’re providing investors with a portfolio that enhances short and long-term appreciation,” Leon said.

Opportunities to invest with Intersection will remain through 2020 as the team continues to secure properties and raise capital for the IDVF. Inquiries about the fund or investing can be sent via email to [email protected].

Dan Leon is the Director of Acquisitions, managing the performance of the funds and investments sponsored by Intersection. Contact Dan at 619-541-6070 or [email protected]

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