BearRock Investments LLC
Lonestar Logistics Building
6333 1st Avenue S. Seattle, Washington
4 Year Hold | 57% IRR
Sold (inactive)
Purchased the industrial building off market with rent substantially below market. Moved rents to market while keeping the tenant base in place. Sold to institutional investor and used sale proceeds to acquire three properties as part of a 1031 tax deferred exchange.
Project Type | Source | Size | Acquisition Price | Sale Price |
|---|---|---|---|---|
Industrial | Industry relationships, not on the market | 60,240 square feet | $5,550,000 | $15,483,500 |
We identified the building through our work as brokers representing a 10,000 square foot industrial tenant. Curing our building tours, we noted that the rents were substantially below market and that the owners would potentially sell the building. Although the market perceived the site as potentially environmentally contaminated, our early due diligence—including extensive soil and water testing—revealed no significant concerns. This allowed us to waive the feasibility study and proceed confidently with the acquisition.
Post-acquisition, we quickly established strong, collaborative relationships with the tenants, which proved invaluable when the COVID-19 pandemic began. By offering thoughtful rent deferral arrangements, we helped every tenant to continue operating from the building. All tenants honored their commitments and fully repaid the deferred amounts, keeping the property 100% current on rent obligations.
As market conditions stabilized, we successfully negotiated lease renewals with the tenants that increased rents by an average of 71%, creating significant value for our investors.
