E-Commerce Distribution Facility: San Diego, California
HG Capital, through a joint venture with an experienced local operating partner, acquired an 89,120 sq. ft. industrial building in central San Diego at a significant discount to the outstanding debt on the property. Previously occupied by an owner-user since 1979, the property presented a unique opportunity as the only available building of its size in a submarket with less than 5% vacancy.
The property is strategically located near the intersection of Interstate 5 and 8, in close proximity to the San Diego Airport, Point Loma, and downtown San Diego. Following its renovation, the property was leased to Amazon, Inc. as a last-mile logistics and distribution facility.
The leased asset was purchased by an institutional investor, producing an IRR in excess of 50% in under three years to HG Capital.
HG Capital’s well-established relationship with the local operating partner proved critical in sourcing this investment, emphasizing HG Capital’s role as a flexible, reliable, and consistent capital partner.
Logistics Facility: Vernon, California
HG Capital and its operating partner acquired the property from a corporate seller in need of short term liquidity. While in escrow, the operating partner successfully negotiated a long term lease renewal with the existing tenant, producing a 14% initial unlevered return on the investment.
HG Capital was able to quickly underwrite the project, form a joint venture, and fund the acquisition. Less than two years later, the property was sold to an institutional investor for a sub-7% cap rate.
HG Capital's speed of execution, brand name amongst local “sharp shooter” operating partners, and familiarity with the underlying real estate fundamentals made this successful investment possible.
Self Storage: Tempe, Arizona
HG Capital and its partner acquired a well-located, but undermanaged self-storage facility in Tempe, Arizona. The investment provided an initial yield on equity in excess of 10%.
Industrial R&D: Sorrento Mesa, California
HG Capital and its operating partner acquired the property from a family trust at a 45% discount to replacement cost due to a high probability that the building would need to be refurbished and re-leased within a year of the initial purchase.
Upon acquisition, the joint venture improved the property with a new roof, HVAC system, lighting, paint, concrete, and various fixtures. Within eighteen months, the property was sold to an owner/occupier at a significant premium to the purchase price.
HG Capital's efficient team structure and familiarity with both the underlying real estate sector and local market made this successful investment possible.