H.I.G. Realty Partners, the real estate platform of H.I.G. Capital, has acquired Southern California Logistics Center (SCLC), a seven property, 3.4 million square foot industrial portfolio located on the former George Air Force Base in Victorville, CA, in an off-market transaction.
SCLC is 100% leased and provides mission critical logistics support to tenants in the consumer products, manufacturing, food and beverage, and aviation sectors.
”The portfolio’s robust adjacent labor pool and location both directly north of the Inland Empire region east of Los Angeles (1.4% vacancy rate and 24% year over year rent growth) and on the grounds of the Southern California Logistics Airport will continue to provide intrinsic value to users that operate within the second densest population cluster in the U.S,” said the company in a statement.
According to the company, SCLC will provide H.I.G. with attractive current cash-on-cash returns, as well as upside via a value-add business plan that is well positioned to benefit from the positive industrial fundamentals in the supply-constrained Los Angeles MSA.
“The acquisition of SCLC is a continuation of H.I.G. Realty’s ability to identify undervalued, strategically located, off-market industrial opportunities,” said David Hirschberg, Co-Head of H.I.G. Realty Partners.
“H.I.G. will employ its value-add expertise to significantly enhance the attractive in-place cash flow from a strong roster of tenants that have occupied SCLC for over a decade,” he added.
“We are excited to own this mission-critical portfolio at a significant discount to replacement cost,” said Adam Belfer, Principal of H.I.G. Realty Partners. “Furthermore, in a post COVID environment, SCLC is well positioned to benefit from the strong labor pool and business friendly environment in the Inland Empire North submarket, as evidenced by the recent announcements of adjacent “build to suit” developments for well-known consumer products and e-commerce tenants.”