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Wednesday, Dec 6, 2023

El Monte Building Sells for $70 Million

Downtown-based Rising Realty Partners has sold 9320 Telstar, a 248,961-square-foot office and industrial property situated on 7.95 acres in El Monte. Sources close to the deal said that it sold for $70 million to Agoura Hills-based Majestic Asset Management.

Acquired in March 2021 for more than $40 million, the property represented Rising’s first combined office and industrial property and the first asset acquired as part of the Rising Investor Platform where accredited investors can participate as a partner in a building’s ownership structure.

The property was built in 1975 and modified to include 163,000 square feet of office space in 2001. Its entire office component is occupied by Los Angeles County, which renewed a long-term lease at the site upon Rising’s acquisition of the property.

After buying it, Rising implemented a series of improvements including office renovations, warehouse buildout, complete roof replacement, restroom upgrades and elevator refurbishment. Additionally, as part of its emphasis on impact, Rising replaced 100% of HVAC systems with more efficient units and is in the process of installing EV charging stations and solar panels, which will provide the majority of the power needs at the property.

“Executing our impact investment strategy, 9320 Telstar jumped from 72% leased at acquisition to 100% leased at its sale,” said Christopher Rising, co-founder and chief executive officer of Rising, in a statement. “This was an opportunistic deal and represents how our ‘impact creates alpha’ philosophy can extend to and benefit properties with industrial components.”

Rising has acquired five industrial sector properties in three states since the first quarter of 2021, including two Sacramento properties, both within the last six months. Rising purchased Alpine Industrial Park for $21.9 million and South Point Business Park for $9.75 million.

Rising, which has historically invested in office properties, is now investing in other asset types as well.

“We’re an impact-focused firm and we wanted to expand that ethos beyond office,” Rising said. “We are still focused on office and property management, but a few years ago we broadened our asset class to include light industrial properties which has unlocked value for our investors via the Rising Investor Platform.”

Ultimately, this asset was a hybrid of office and industrial product that falls into a “light industrial” category.

“A firm like ours can develop strategic opportunities from multi-tenant light industrial properties getting below replacement cost focusing on infill markets with very limited land and in high-traffic areas,” Rising said. “In many of these locations, light industrial properties have an occupancy rate of more than 90%.”

CBRE Group Inc.’s Michael Longo, Todd Tydlaska, Sean Sullivan, Darla Longo, Will Pike, Melissa Moock, Anthony DeLorenzo and Mark Shaffer represented Rising Realty in the 9320 Telstar transaction.

Rising Realty will continue to manage the 9320 Telstar property after the sale.
Moving forward, Rising said his company will continue to seek out more industrial properties and will determine whether to turn them around quickly or put them on long-term holds.

“Yes, we are planning to acquire more,” Rising said. “Our hold times are based on a deal-by-deal basis. We plan to be opportunistic and inform on decisions based on where the market is today and where it will be in the future.”

New owner Majestic Asset Management, meanwhile, owns more than 55 commercial and multifamily properties spanning more than 3 million square feet, according to its website. In March, Majestic purchased a six-building industrial property totaling nearly 200,000 square feet in Goleta for $51 million.

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