Summit III at Valencia
Credit-Anchored, High-Yielding Office Acquisition Opportunity | Valencia, CA
Marketing description
Attractive Market Momentum
►Greater LA return to office stats trails national trends primarily due commute factors that are more of factor in Los Angeles than in other large cities. Valencia’s strong labor base will continue to attract companies as employers seek to offer solutions to employees who are reluctant to commit to returning due to long commute patterns. Furthermore, reverse commuting patterns allow Valencia businesses to attract employees from the geographically diverse San Fernando
Valley, which, if ranked by total population, would rank among the top 10 cities in the United States.
►Newhall Ranch, the largest residential entitlement in LA County is now under construction and will deliver 20,000 new residences by mid 2040s. Not only will Summit at Valencia benefit from its proximity to this development, but the market will as well as employers continue to be attracted to the area due to its strong demographics, safety, affordability, and amenity base.
Investment highlights
The Opportunity
►Originally constructed in 1999 in anticipation of the development of Newhall Ranch (now FivePoint Valencia)--the largest master-planned development in North American at conception with 21,500 homes across 14,000 acres--which has begun delivery of the first homes and will continue to do so over the next decades for an anticipated 60,000 residents.
►Summit III offers excellent location at the junction of Interstate 5 and Highway 126, providing access to employees in Los Angeles and Ventura Counties. The surrounding neighborhoods are enriched with growing amenities serving current and incoming residents and businesses.
Stabilized Multi-Tenant Office Opportunity with Upside
►Health Occupancy: Currently ±97.6% leased, the rent roll reflects a tenant mix that is diversified across industries and business models. The two anchor tenants, Auto Club of SoCal and Barrister Executive Suites, have occupied their spaces for 10+ years. More than half of the rental area are occupied by investment-grade tenants (Auto Club of Socal, AM Best A+; State of California, Moody’s Aa2).
►Low Rollover Risks: The remaining in-place weighted-average lease term totals ±4.8 years, with less than 39% of the rentable area expiring in the first 5 years of ownership.
►Durable Cash Flow: Year 1 NOI totals $1.07 million, improving to $1.55 million during the 10-year hold period. In-place annual rent growth provides an attractive protection against inflationary risks.
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