TUSTIN, Calif. – Guthrie Development Company, a full-service commercial real estate investment and management company based in Irvine, California, has acquired Pacific Tustin Commercenter, a Class-A 69,930 square-foot multi-tenant industrial and retail business park in Tustin, CA, for $19.7 million.
In this unique transaction, the firm acquired the buildings and land from two different sellers, explains Rob Guthrie, CEO of Guthrie Development.
“We negotiated the purchase of the buildings at an attractive price because they were subject to long-term ground lease,” says Guthrie. “Simultaneously, we negotiated an off-market purchase of the land at one-third of its market value.”
Upon executing both the property and land transactions, the firm then combined the project, thereby acquiring the entire business park.
“While many other investors are not actively completing new deals due to market volatility, we are continuing to close transactions as our team is well-versed in the Orange County industrial market,” says Guthrie. “The industrial leasing sector in this region is very robust. There is limited supply and historically high occupancy; therefore, we are confident to move forward with our acquisition strategy.”
Chuck Wilson and Brian Chastain of Colliers International represented Guthrie Development on the purchase of the buildings while Clyde Stauff, also with Colliers, represented the company on the purchase of the buildings.
According to Colliers, Tustin’s industrial market has been particularly strong this year, with a vacancy rate of 0.4% and 70,748 square-foot net absorption at the end of Q1 2022. In addition, the Orange County industrial market experienced continued expansion and profitability in Q3 2022 with a positive absorption for the county’s fifth straight quarter and rising asking rents of 11.9% year over year.
Pacific Tustin Commercenter is an institutional quality mixed-use business park. “Situated in a prime Orange County location on the corner of two prominent streets in Tustin, Edinger Avenue and Red Hill Avenue, the property is positioned to attract affluent users within this booming infill market,” explains Guthrie.
Colliers International reports Orange County’s economy ranks amongst the world’s top 30, and the market’s industrial sector maintained a 2.2% vacancy rate through Q3 2022. Specifically, Colliers states the Tustin industrial market makes up 2.5% of the prosperous Orange County industrial market.
“In the thriving Orange County market, Pacific Tustin Commercenter is poised to experience high traffic and interest,” notes Guthrie.
Comprising two multi-tenant industrial buildings and a restaurant, Citrus Café, on the corner of the property, the industrial buildings are currently 100% occupied under long lease terms, with the corner unit lease being restructured.
“We are working with the city of Tustin to sub-divide the retail corner from the industrial buildings,” says Guthrie. “We negotiated a buyout of the restaurant with eight years remaining on their lease. As a result, we will be able to increase the rental income by 350% by leasing to a tenant.”
According to Guthrie, the company has already received eight offers for the 1.2-acre retail corner from well-known and highly regarded companies.
“In addition to leasing the corner property, we will maximize value by completing a capital repair program which includes re-roofing, landscaping updates, and new project signage, then subdividing and selling the industrial and retail properties as separate investments,” shares Guthrie.
The property is located at 1421, 1451, and 1481 Edinger Avenue, Tustin, California.
About Guthrie Development Company
Guthrie Development Company (“GDC”), based in Irvine, CA, is a privately held, fully integrated real estate company specializing in the acquisition, development and/or rehab, management and disposition of commercial/industrial properties, primarily in the Southern California region. GDC principals and associates have extensive industry experience covering a diverse array of services including development, rehabilitation, entitlement, construction management, asset management, property and association management, sales, and finance and accounting.
GDC was founded in March 2000 by Robert Guthrie, who has over 38 years of experience in the field of commercial real estate and is responsible for the strategic vision and goals of the company. Between 2000 and 2022, GDC developed and/or acquired and sold over 3 million square feet of industrial property worth approximately $750MM. GDC has an excellent reputation in its market segment, including its performance on behalf of the company’s capital partners during the latest market downturn.
GDC also has an affiliated asset and property management company, Guthrie Asset Management Company (“GAM”), which manages all of the related GDC projects and commercial owners associations.
