Fortress quietly assembles SoCal industrial portfolio

Private investor has spent at least $259M on properties since June

Los Angeles /
Feb.February 17, 2022 01:30 PM
Fortress Investment Group’s Peter Briger and Wesley Edens (Long Arc Capital, Getty Images, Google Maps)

Fortress Investment Management has spent the last eight months quietly assembling a substantial portfolio of industrial properties across Southern California, The Real Deal has learned.

The New York-based private investment manager has spent at least $259 million on small industrial sites in Los Angeles, Orange, San Bernardino and Riverside counties since June of last year, according to a TRD review of property records filed with each county.

Fortress did not respond to a request for comment.

Fortress used an initial $300 million loan from Deutsche Bank to purchase some of the properties, loan documents show. The loan, first provided in June, was increased to $400 million in October 2021.

This month, Deutsche Bank provided Fortress with another $250 million loan, and some of the proceeds have already been used to buy assets. Deutsche Bank did not respond to a request for comment.

Softbank-owned Fortress bought the properties through multiple limited liability companies with names starting with “CREF3,” records show. The company has previously used the same acronym to purchase hotel properties, including the Frenchman’s Reef Marriott in St. Thomas in the U.S. Virgin Islands.

The deals come amid a booming industrial market that is showing no signs of slowing down. Investors spent a total of $20 billion on industrial properties in Los Angeles County, the Inland Empire — made up of Riverside and San Bernardino counties — and Orange County last year. That’s almost double the amount that was spent in 2020 and $5 billion more than what was spent in 2019, according to CBRE.

In Orange County, the company spent about $134 million on 10 properties in Irvine, Santa Ana, Anaheim Platinum Triangle and Costa Mesa from July through this month, according to property records.

The company’s most expensive deal in Orange County was its $26 million purchase of a five-acre site at 3128 Red Hill Avenue in Costa Mesa, a Class B industrial property.

In Los Angeles County, Fortress bought at least nine properties from June of last year through this month for a total of $126 million. The properties were spread out across mostly industrial areas across the county — in Carson, Downtown Los Angeles, Inglewood, Wilmington, Chatsworth, Hacienda Heights and Compton.

Most of the properties were bought from longtime property owners who also occupied the sites.

Fortress purchased one property at 336 West 31st Street from Jack Rimokh, the chief executive officer of Los Angeles handbag licensor Signal Products, in a sale-leaseback deal, meaning Signal Products will keep occupying the space for the remainder of its lease.

It’s unclear whether Fortress will renovate or demolish the properties, once some of the existing leases are up. Deutsche Bank’s financing did not include provisions for construction.

Fortress has sold off assets in California in recent years, including a 225,000-square-foot office campus in Glendale it owned with Rising Realty. The firm sold it in April of last year for $79 million to Gemdale USA.





    Related Articles

    arrow_forward_ios
    Westmont's Andy Plant and Westmont Village Westmont Living, iStock)
    Senior community nixes industrial development for more residential
    Senior community nixes industrial development for more residential
    FivePoint Holdings' Dan Hedigan (Fivepoints, Ranch on the River)
    FivePoint slashes workforce 29%, posts $37M loss
    FivePoint slashes workforce 29%, posts $37M loss
    Cedars-Sinai's Thomas Priselac and 3400 Lomita Boulevard (Cedars-Sinai, LoopNet)
    Cedars-Sinai pays $70M for Torrance medical offices
    Cedars-Sinai pays $70M for Torrance medical offices
    IGP Business Group's Matt Ilbak and Moreno Valley Mall (IPG Business Group, Moreno Valley Mall)
    Indoor mall in Moreno Valley up for mixed-use makeover
    Indoor mall in Moreno Valley up for mixed-use makeover
    BentallGreenOak Sonny Kalsi and Stream Realty's Lee Belland and Mike McVean with 10380 Alder Avenue (LinkedIn, Stream Realty Partners, LoopNet)
    Newly built Inland Empire warehouse fetches $83M
    Newly built Inland Empire warehouse fetches $83M
    Michael Shabani with 8400 Melrose Avenue (Google Maps, iStock) Gucci, Melrose
    Gucci plans flagship at Melrose & Melrose
    Gucci plans flagship at Melrose & Melrose
    Argent Retail's Terence Bortnick (LinkedIn, iStock)
    OC commercial brokerage Argent Retail Advisors files for bankruptcy
    OC commercial brokerage Argent Retail Advisors files for bankruptcy
    LuMar's Babak Nehoray with10756 W Wilkins Ave (Avvo, Labyrinth)
    Developers plan five-story apartment building in place of single-family home in Westwood
    Developers plan five-story apartment building in place of single-family home in Westwood
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...