Laguna Beach, CA – Dornin Investment Group (“DIG”) has sold two light industrial buildings (“Laguna Canyon Industrial”) on May 11, 2022. With a combined 29,835 SF, Laguna Canyon Industrial located at 2133-2147 and 2171-2183 Laguna Canyon Road sold for a combined $21,600,000 ($724 PSF) to an international high net worth investor. DIG achieved an incredible 46% Leveraged IRR and 2.45x Equity Multiple.
The property is among the rarely traded generational coastal assets in Orange County that is virtually impossible to replicate, sitting just minutes away from Laguna Beach’s famous commercial district. It is well known in the community for the Wyland Whale mural that has been at the property since 1987. DIG recently completed renovations such as exterior painting, parking lot, three-phase power, awnings, tenant improvements, and landscaping upgrades.
DIG acquired 2171-2183 Laguna Canyon Road in August 2019 in an off-market transaction and then acquired the adjacent 2171-2183 Laguna Canyon Road property in April 2021 through another off-market transaction for a combined purchase price of $11,850,000.
The property was sold by the Orange County CBRE team of Anthony Delorenzo, Sammy Cemo, and Bryan Johnson who represented DIG. Cemo noted “Laguna Canyon Industrial is the best, and most functional industrial incubator project along the Canyon. DIG’s improvement program included modernizing the exterior, reconfiguring the suites to maximize the industrial functionality, and adding Phase 3 power to the project. The project’s clear superiority allowed DIG to achieve such incredible rents, and why we were able to push pricing to an unprecedented level.”
Ryan Harman, Kevin Bayless, and Jesse Knight of Lee & Associates Irvine, who sourced both the acquisitions, were landlord representatives for leasing and consistently maintained occupancy at or near 100% throughout the hold period while driving lease rate increases of nearly 70%.
Amy Harris, VP of Asset Management at DIG, stated “Laguna Canyon Industrial represented an opportunity to capitalize on a uniquely situated property within our back yard. Our ability to source both properties separately off-market, execute our renovation plan, significantly increase lease rate, lease to 100% occupancy, and sell as a package illuminates our local market expertise and ability to add significant value in a short time frame. We still maintain strong positions in the area and are targeting similar industrial/flex value add and development opportunities in CA, NV, and AZ.”
Mark Nicoletti of Allen Matkins was instrumental in managing the closings of both the acquisitions and dispositions.