Collins Business Center

(Case Study)

Orange, CA

Square Footage: 91,134 Acquired: November 2016 Purchase Price: $12,000,000

The acquisition of Collins Business Center was a rare Orange County industrial park transaction.  Constructed in 1969/70 by the Antoyan family, this 91,134 square foot, five building project – with a “ground zero location” at Main and Collins Streets in the City of Orange – had never been on the market for sale.  In a joint venture with HG Capital of Menlo Park, CA, CIP Real Estate was able to acquire the park in October 2016 at an attractive cost basis of $12 million ($130 per square foot) due to significantly below market in-place rents and short lease terms. In addition, the project needed substantial deferred maintenance.

The business plan for Collins Business Center included $600,000 capital improvement program consisting of a complete exterior cosmetic renovation, major interior suite upgrades, roof and HVAC replacements, and a re-mapping of the five existing parcels to allow for the separate sales of buildings to users and investors.  To date, three (3) buildings have been sold at above pro forma pricing.  The remaining two multi-tenant buildings, with average unit sizes of between 1,200 to 2,500 square feet, will be refinanced in 2018 for a long term hold.