November 7, 2019 – Avison Young, the world’s fastest-growing commercial real estate services firm, announced today that it has completed the off-market, $28-million sale of a 100% occupied 224,350-square-foot (sf) industrial facility located on 15.1 acres at 41995 Zevo Drive in Temecula, CA, a city in south Riverside County.
Avison Young Principal Stan Nowak, based in the company’s Inland Empire office located in Ontario, CA, represented the 1031 / 1033 exchange buyer, Karney Properties, who plans to hold the property long-term. Nowak also represented the seller, Zevo Drive Holdings, LLC, who was an owner-user operating in the facility as Glasswerks. Avison Young Principal Jay Maddox who is based in the company’s West Los Angeles office consulted on the financing of the deal.
“The sale is testimony to a trend of institutional and large private equity capital seeking select high-growth secondary and tertiary markets in a search for higher yields. Temecula, along with the greater Inland Empire market is a hotbed for that interest,” comments Nowak.
He adds, “Prior to putting the asset on the market, Avison Young worked with the owner-user to lease two vacant spaces to Fortune 500 companies. With strong leases in place at the time of sale, as well as the potential for development upside on the excess land, the buyer saw this as a prime, cash-flowing investment opportunity for both the short and long-term.”
Both new leases were negotiated off-market on behalf of the landlord through Avison Young’s broker network including Avison Young Principal Corey Martin. The new leases included Motorola Solutions, Inc., who signed a 12-year lease for +/-107,000 sf, and Keystone Automotive/LKQ Corp. who signed a seven-year lease for +/-35,000 sf. Glasswerks occupies approximately 83,000 square feet.
While this is Karney’s initial investment in the Temecula submarket, the family-owned firm has developed and acquired millions of square feet of space leased to distribution, manufacturing, creative and retail tenants over the span of nearly 70 years throughout not only some of Southern California’s most dynamic submarkets, but also in Arizona, Colorado and Illinois.
In Temecula, the 215 and 15 freeways provide convenient access for distribution. “We are seeing more major players showing interest in the Temecula Valley area, with large purchases by investors like Blackstone Group, Exeter Properties Group and Karney Properties,” observes Nowak. “Southwest Riverside County and Inland Empire East offer tremendous opportunities if you know where to look.”