TR Produce Building

Address:                     808 J Street San Diego, CA 92101

Square Footage:       22.559

Purchase Price:         $13,300,000

Anticipated Hold:   3-4 years

Building Profile:     Ground Floor Creative Office

The TR Produce building consists of approximately 22,000 square feet of single story creative office that is part of a larger mixed-use building located just outside of Petco Stadium’s center field wall. The property spans the entire block on J Street between 8th and 9th Street. The interior is currently leased to Walmart who sub-leases the entire space to Underground Elephant, a local digital advertising agency.

Underground Elephant is the jewel of the explosive growth in the East Village and it was recently won the San Diego Architectural Association Orchid Interior Design Award. Designed by Basile Studios, Underground Elephant’s office is recognized for it’s unique warehouse office concept, which is complete with an indoor schoolhouse, five 100-year old olive trees, a multitude of collaborative meeting spaces, and local art installments.  

With close proximity to downtown’s world famous Gaslamp District, the 130 blocks comprising the East Village has burst into life over the past 2 years. The revitalization of this warehouse district was fueled primarily by Petco Park, which opened in 2004. Today, numerous hotels, restaurants, rooftop bars, cafes, galleries and live music venues attract locals and tourists alike.

The Hub

Asset Location:                                Vista, CA
Total Square Footage:                   27,469
Purchase Price:                                $6,050,000
Anticipated Hold Period:             2 Years
Building Type:                                  5 Retail Buildings

Status of Asset:                               Stabilized
 

In 2016, JS Western acquired 5 single-story buildings within a 9-building shopping center known as Vista Palomar Park. The center is situated at the corner of Palomar Airport Road and Business Park Drive in Vista, CA. The buildings are demised into 16 units with an occupancy of only 33% at the time of acquisition. Within 10 months, leases were signed for the entire property at rates that exceeded our initial pro-forma.

The shopping center is located at the confluence of a large and rapidly growing industrial and office market to the west and an affluent residential population to the south. Within the center itself, there are several strong co-tenants in the buildings not being purchased, including a Starbucks, Jack in the Box, 7-Eleven and a Taco Bell.
 
The JS Western team believed the property was undervalued due to lack of proactive management, tenant improvement capital offered to potential tenants, lack of a unifying brand to the center, and obsolete Art-Deco inspired architecture. JSW created a theme and brand called “The Hub” applying the new design to the facade and landscape, as well as the common areas. JSW created a plan for the optimal tenant mix, ensured adherence to parking requirement and directed leasing efforts accordingly. The plan came together with a synergistic blend of tenants including a local market, coffee, yoga, salon, and interesting restaurant uses. This internet-resistant mix of daily needs oriented tenants have revitalized the center and it now better serves the community.

PACE

Programs of All-Inclusive Care for the Elderly

Asset Location:                     Chula Vista, CA
Total Square Footage:        23,500
Purchase Price:                     $4,200,000
Anticipated Hold Period:   15 Years

Anchor Tenants:                   San Ysidro Health Care
 

In 2018 JS Western (“JSW”) acquired a former CVS in San Diego, CA measuring over 23,000 square feet that was part of a larger shopping center with multiple owners. During the acquisition period, we reached out to a local PACE operator and executed a long-term lease for the entire space. The adjacent property owners were unaccustomed to having a medical use within a retail center and interpreted decades old CC&Rs in a way that would have made it difficult for the operator to optimize parking, redevelop their facade and receive approval for their use. Ultimately, JSW worked in conjunction with the operator and the adjacent owners to come up with some creative solutions resulting in an amendment to the CC&Rs that mutually benefited all parties. JSW provided the operator with their initial capital request to build out their space. However, due to increasing construction costs, the operator requested additional funds. JSW provided the requested funds in exchange for amortizing the amount over their lease term.

Greenbriar Plaza

Asset Location:                    Denver, CO
Total Square Footage:     114,000
Purchase Price:                    $8,200,000
Hold Period:                         2.5 Years

Sale price:                              $12,000,000

Anchor Tenants:                  Family Dollar, Ace Hardware, Pizza Hut
Status of Asset:                    Sold May 2017
Return to Investors:           28.9% IRR; 1.73x mult

Greenbriar Plaza was acquired in November 2014 from a local operator who had owned the property for over 10 years. It was 100% occupied at the time, but JS Western recognized that the asking price was considerably lower than it's actual value in the rapidly escalating Denver market. Upon acquisition, we immediately made substantial repairs to the roof, parking lot and replaced lighting with cost-effective LED lights. We further created value by professionally managing the center which attracted a higher caliber of tenancy. We were able to garner tenants and/or replace rents at significantly higher amounts on some critical, hard-to-lease space, ultimately increasing our NOI substantially.

Menlo Park Plaza

Asset Location:                     Portland, OR
Total Square Footage:         130,000
Purchase Price:                     $19,200,000
Anticipated Hold Period:   10 Years

Anchor Tenants:                   Auto Zone, Walgreens
 

Menlo Park Plaza consists of a 130,000 square foot anchored retail center that was acquired in 2008 for $19,200,000. The property was anchored by Staples (dark) and also includes a Walgreens and AutoZone on separate pads. In total, the center was approximately 75% occupied upon acquisition.

Staples was paying below market rent and provides an opportunity to back-fill accretively. Additionally, with approximately 20,000 square feet of vacant space adjacent to former Staples, we have an option to consolidate the space, back-filling the 40,000 square feet with a viable anchor.  

The plan is to re-tenant the asset, providing it with an anchor that will draw more traffic than Staples, thus benefiting the shop tenants and creating a more vibrant shopping center. Upon execution of the plan, we can subdivide the pads and sell them as single tenant NNN opportunities, thus reducing our basis and creating additional value.