UPDATED, 4:11 p.m., Jan. 16: Brookfield Asset Management has bought a complex of four warehouses in Santa Fe Springs for $45.5 million, expanding its industrial footprint in Southern California.
The seller was a joint-venture between Irvine-based Sperry Equities and an unnamed family foundation local to the area, which held a split 90-10 stake in the property favoring the family, The Real Deal has learned.
The sale shakes out to roughly $190 per foot for the 240,000 square-foot Colonnade Business Park at 9720 Norwalk Boulevard.
The partnership paid no taxes on the deal, since the family foundation was a registered non-profit, according to Rand Sperry, the firm’s principal. He declined to name his partner in the deal.
In order to reap the tax benefits, the partners had to close within the next four years, having bought the property in 1997 for $13 million.
But when Brookfield approached them to make a deal, they decided not to wait.
“Three or four years from now, we could be in a recession,” Sperry said. “We’d never seen sub-five caps in Southern California” for an industrial asset, he added, referring to the low capitalization rate that Brookfield paid.
Sperry Equities’s share of the price was $4 million, while their partner took home the balance.
With four buildings, the park can accommodate multiple tenants, including general contractor MATT Construction and Kloeckner Metals, a national steel supplier and manufacturer that recently merged its Los Angeles facility into its space at Colonnade.
The facility also has some limited office space, which the Los Angeles County Sherriff’s Department leases for document storage, Sperry said.
Business parks like Colonnade are not as common in L.A. as their single-tenant counterparts, but the ones that exist command a high price. Boston Properties bought the Santa Monica Business Park for $616 million last year, paying more three times as much per foot as Brookfield did in Santa Fe Springs.
Luke McDaniel and Cameron Driscoll of JLL represented Brookfield, which confirmed the deal but declined to comment further.