Layton-Belling Seeks Industrial Sites
Newport Beach real estate firm Layton-Belling & Associates plans to buy about $180 million worth of Southern California industrial properties through its latest investment fund.
LBA Industrial Fund I, backed mostly by institutional investors, just acquired two multi-tenant complexes in Orange County for about $32 million, said Steve Briggs, the fund’s portfolio manager. The fund will continue buying well-occupied, high-quality industrial buildings over the next year and a half, he said.
The managers’ strategy is to assemble a portfolio of stable, well-located properties that produce steady cash flow from rents. There is strong demand for such buildings from tenants and other investors, Briggs said, so there is a good chance rents and property values will appreciate before the fund sells the portfolio in about seven years.
Targeted property types include distribution, light-manufacturing and multi-tenant business parks costing between $5 million and $30 million, primarily in the thriving industrial core of central Los Angeles County.
The fund has acquired two warehouse and light-manufacturing complexes: the 215,682-square-foot Canyon Corporate Center in Anaheim and a 268,612-square-foot facility at 2100 E. Valencia Drive in Fullerton.
Layton-Belling’s previous funds targeted office and industrial properties that needed improvements and could grow in value with capital investments and better management, founding principal Phil Belling said. The industrial funds will be less risky and hence aren’t expected to generate returns as high as those achieved by the firm’s so-called opportunity funds.
A cross-section of institutional and individual investors joined Layton-Belling principals to pool nearly $80 million to create the fund, Belling said. By taking advantage of today’s historically low interest rates, fund managers anticipate they will be able to buy about $180 million worth of real estate.
Industrial rents continued to fall during the second quarter in certain markets such as south Orange County, according to brokerage Colliers Seeley. Activity has picked up in other areas including the western Inland Empire and San Gabriel Valley. Rents have generally flattened, but sales prices have typically continued to rise.
Colliers Seeley also reports plenty of investor competition for quality industrial properties. Though few such assets are listed for sale, numerous buyers armed with low-cost financing are scouring the Los Angeles Basin in search of acquisition opportunities.
Layton-Belling, which will manage the fund’s properties, acquired more than $1 billion worth of Southern California real estate over the last seven years, primarily through its investment funds. More than one-third of the activity has been in the industrial category.
