Inform Your Approach to Infill Markets

Transcription

1 Inform Your Approach to Infill Markets Jay Todisco, Ware Malcomb Jake Smith, Duke Realty Jon Pharris, CapRock Partners, LLC Damon Austin, Prologis

2 Presenters Jay Todisco, AIA, LEED AP Jake Smith Jon Pharris Damon Austin Executive Vice President, Board of Directors Ware Malcomb VP of Leasing & Development Duke Realty President & Co-Founder CapRock Partners, LLC Senior Vice President, Capital Deployment, West Region Prologis

3 Infill Industrial Program Topics Redevelopment: Ground Up Value Add Brown Field Multi-Story Industrial (Conversion Before to Higher Better Use)

4 Ground Up Redevelopment: CHEVRON La Mirada Prime LA Mid Counties location 109,500,000 sf submarket 0.9% vacancy 684,222 sf under construction

5 Ground Up Redevelopment: CHEVRON La Mirada Former Chevron pumping station from 1920 Adjacent to existing Duke building 22-acre site Heavily contaminated

6 Ground Up Redevelopment: CHEVRON La Mirada Soil management plan Chevron $30m+ remediation Imported 120,000 cy clean fill Relocated 3 existing pipelines

7 Ground Up Redevelopment: UPS La Mirada Closed 8/2016 upon completion of remediation UPS deal 10/2016 without grading or CEQA Mutual termination options 10 year lease / October 2017

8 Value Add Redevelopment: RADIUS Tustin, CA Prime John Wayne Airport location; minutes from 5 & 261 fwys, 2 major shopping centers, and John Wayne Airport 110,000 SF manufacturing building constructed in 1977 on 7.4 acre site CapRock purchased with R&D tenant in tow for 40K SF

9 Value Add Redevelopment: RADIUS Tustin, CA Tenant in tow needed limited parking, resulting in parking ratio of 4:1000 for balance of the building CapRock completed $2.0M+ renovation to convert vacant space into creative office and engaged strategic marketing firm to develop website Before & marketing materials BBQ, putting green, grass sport court, bocce ball, fire pit, outdoor work areas Before After

10 Value Add Redevelopment: RADIUS Tustin, CA Pre-development industrial lease rates = $0.75-$0.85 NNN Post conversion office lease rates = $2.00+ NNN Existing tenant expanded an additional 42,000 SF at attractive R&D lease rates Before 28,000 SF of office remains and includes 6:1 parking and a unique campus environment Before After

11 Brown Field Redevelopment Vernon, CA Class A location: In-fill LA Central/Vernon submarket consists of 162 MSF 1% overall vacancy rate Limited construction and delivery of Before new product within submarket Before After

12 Brown Field Redevelopment Vernon, CA Subject Property currently consists of 6 obsolete manufacturing buildings Management intensive due to winding down of aerospace operations Significant environmental remediation and capital required Before during demolition and redevelopment After

13 Brown Field Redevelopment Vernon, CA PLD dominant presence in submarket consisting of 49 properties, 5.5 MSF, 100% occupancy Convert to highest & best use, maximizing the value of the site Redevelopment Before of two class A Industrial Buildings After

14 Brown Field Redevelopment Vernon, CA Before Current entitlements obtained from City of Vernon Extensive work with EPA, DTSC and RWQCB to finalize voluntary remediation plan Before Vertical construction planned for YE or early 2018 After

15 Industrial Infill: Why Multi-Story Industrial Retail Renaissance: e-commerce Last Mile expectations High Demand: High Land Values Land Constrained: Max FAR Old: Rooftops, Zip Codes, Demographics = location New: Algorithms, and Clicks = location

16 Multi-Level Metro Fulfillment Center Low Vacancy rates. Engineering & design challenges Rent premium (or) discount? How much does it cost? When does it pencil? Multilevel Last Mile Prototype

17 Multi-Level Metro Fulfillment Center 3 Story Prototype: (138k/138k/138k=414) (9 ac)

18 Inform Your Approach to Infill Markets Final thoughts Questions? Duke Realty CapRock Partners, LLC ProLogis Ware Malcomb