On August 3, 2023, Dornin Investment Group (“DIG”) acquired a 88,410 SF commercial property off-market for $18M ($204/SF) at 1602-1634 Edinger Avenue, Santa Ana, California 92705.

DIG is targeting to acquire $300M of light industrial assets in California, Nevada, and Arizona over the next 24 months. The transaction follows DIG’s recent $22M, 46% IRR, and 2.75x Equity Multiple success in Laguna Beach, California. The acquisition represents DIG’s second Southern California light industrial transaction this year with JV Partner, Sundance Bay. DIG is under contract on another light industrial project in Nevada and is pursuing several other off-market and listed opportunities across the Southwest.

The 7-building property sits nestled just off the California State Route 55 highway on Edinger Ave, a major Santa Ana thoroughfare. 170 commercial storage units comprise five of the buildings and other two buildings are leased by light industrial commercial companies. Rents at the property for both industrial and commercial storage uses are below market by more than 50%. Occupancy is estimated to be at or near capacity for decades. DIG enters the property ready to immediately create value, marking rents to market and executing an environmental strategy to achieve case closure from the regional water board authority.

Philip Smith, Director of Acquisitions at DIG, stated, “Urban infill light industrial opportunities continue to perform given supply constraints. Often, properties like this are in many ways operated like they were decades earlier, focused simply on the continuity of cash flow. That continuity enables us to immediately unlock value by modernizing the property, institutionalizing operations and leasing, and achieving significant increases in rents.”

DIG overcame multiple complex hurdles with respect to deal structuring: 1). Strategic sale-leaseback structure was negotiated with the largest tenant, an affiliate of the seller, 2). Site environmental issues and challenging debt markets were overcome through a seller-carry cap cost structure and 3). Equity was partially originated from separate accounts utilizing 1031 exchange capital, which further complicated the capitalization stack.

John Marshall at JLL Capital Markets arranged the joint venture equity partnership. Andy Friedman represented the seller, a California based company. Mark Nicoletti, Maxwell Shapiro, and John Allen of Allen Matkins provided legal expertise. First American Title Company provided title and escrow services.

About Dornin Investment Group
Dornin Investment Group (“DIG”) is a fully integrated real estate investment firm with offices in Laguna Beach, CA and Las Vegas, NV. DIG invests in commercial and residential real estate across the capital stack in partnership with a broad base of institutional and private investors. The firm specializes in distressed, opportunistic, and value-add investments in all major property types with a focus on office, flex, industrial, multifamily, and hospitality properties in addition to non- and sub-performing loans. DIG’s full-service investment platform includes asset and property management, leasing, design, construction management and capital markets advisory services through its wholly owned subsidiary, Dornin Realty Advisors. For more information, visit www.dorningroup.com.

About Sundance Bay
Sundance Bay was founded in 2012 with an investment in two small multifamily assets. Since then, Sundance Bay has significantly expanded its multifamily portfolio and launched Senior Debt and Net Lease Investment verticals nationwide. Sundance has $3.6B in total capitalization and $2.3B assets under management. The firm has $4B combined acquisition and development experience and 150+ years of combined team experience across 75 team members. For more information, visit www.sundancebay.com.