Real estate investment firms form joint venture to secure rare value-add opportunity in supply-constrained port submarket
Newport Beach and Signal Hill, Calif. (February 22, 2021) – RanchHarbor, a real estate investment firm based in Newport Beach, Calif., and Manhattan West Real Estate, a fully integrated real estate investment and management firm based in Los Angeles, today announced their joint venture (JV) partnership in the acquisition of a .79‐acre value-add industrial property located in Signal Hill, Calif. The property consists of two single-tenant industrial buildings totaling 18,682 square feet with a shared, secured yard. Each building has one dock-high door and one grade-level door, a quality that is valuable and in high demand for tenants in this size range.
RanchHarbor and Manhattan West Real Estate purchased the property off-market, substantially below replacement cost and at an attractive basis. The JV acquired one building with substantial term remaining on the lease and one building vacant at closing. The business plan is to perform deferred maintenance and capital improvements to the property including “white boxing” of the vacant building to improve its marketability and make it move-in ready. The JV has retained Marc Bonadando and Brad Connors with Kidder Matthews to market and the lease the available space.
“We are pleased to partner with Manhattan West, a well-respected operator with a solid track record, on this investment,” said John Meek, managing principal at RanchHarbor. “This is a rare opportunity to invest in Signal Hill, a submarket with extremely low vacancy rates and a short supply of industrial spaces of this size and specifications. The property is an excellent addition to RanchHarbor’s growing portfolio as we continue to find undervalued opportunities in the ‘small cap’ sector with proven operating partners that know their markets well.”
RanchHarbor provided a full capital stack solution for the transaction. The company’s capital markets advisory platform, RH Advisors sourced a 36-month, attractively priced, fixed-rate non-recourse bridge loan from a bank lender. This debt structure will allow for maximum flexibility in executing the business plan while mitigating exposure to interest rate fluctuations.
The subject property is well located at the northeast corner of Walnut Avenue and E. Burnett Street within the highly supply-constrained South Bay industrial submarket. It is approximately two miles from Interstates 405 and 710. The area is a central node for businesses associated with port activity and last-mile distribution. The property is a 15‐minute drive to the San Pedro Bay Port complex and is easily accessible to air freight travel at the Los Angeles International and Long Beach Airports.
“Signal Hill is an extremely tight industrial real estate submarket with little turnover of asset ownership and limited new construction over the last seven years,” said Adam Norvell, director of real estate at Manhattan West Real Estate. “With vacancies around 1.3%, opportunities to acquire assets here are infrequent, and we are happy to partner with the experienced team at RanchHarbor on this investment. Together we will strategically enhance the property’s aesthetic and functionality, creating a facility that is in high demand.”
This investment marks RanchHarbor’s first portfolio acquisition in 2021 and its third since the company’s launch in 2020. The firm is actively seeking value-add and opportunistic general partner (GP) and limited partner (LP) commercial real estate investment opportunities in select western U.S. markets with targeted equity commitments between $2 million and $8 million.
Since 2019, Manhattan West has invested in three separate transactions and now has ownership in over 50,000 square feet of industrial space in Southern California. The firm is actively seeking value-add and opportunistic industrial investment opportunities in major western U.S. markets, with a focus on Los Angeles.
Founded in 2020, RanchHarbor is an integrated, real estate investment firm based in Newport Beach, Calif. The company combines the real estate experience and industry knowledge of Isles Ranch Partners with that of former principals from Landmark Real Estate. RanchHarbor offers joint venture equity and general partner co-invest equity, targeting commercial and multifamily real estate investments between $2 million and $20 million in select western U.S. markets. It also provides sophisticated asset management, receivership and capital advisory services to institutional and private investors, asset owners and operators. For more information, visit ranchharbor.com. Follow the company on LinkedIn.
ABOUT MANHATTAN WEST REAL ESTATE
Manhattan West Real Estate is a first-of-its-kind financial solutions company. The firm operates in three distinct areas that seamlessly integrate investment management with a full array of personalized services to manage day-to-day financial life. The firm’s asset management offering includes traditional equity and fixed income portfolios while the alternatives platform leverages strength in real estate, venture capital, private equity and private debt to deliver a meaningfully diversified portfolio. The Manhattan West Real Estate strategy offers real estate investment opportunities through a series of special purpose vehicles and direct investment funds. Currently, Manhattan West is open to admitting prospective investors into Manhattan West Tax Deferred Real Estate Fund III, LLC. For more information, visit mwestasset.com. Follow the company on LinkedIn.