JLL Income Property Trust, a daily net asset value REIT, has sold an industrial warehouse located in the Los Angeles submarket of Valencia, California for $5.6 million, representing appreciation of 35 percent above the original purchase price. The property was sold to the building’s current tenant.
The property was initially purchased in 2016 as part of a five-building warehouse portfolio in the Valencia market that JLL Income Property trust acquired as it was ramping up its allocation to the industrial property sector.
“On occasion, strong demand from certain tenants to own their own building also provides the added benefit of harvesting attractive gains on sale,” said Allan Swaringen, president and chief executive officer of JLL Income Property Trust. “In addition to maximizing value by selling the asset at a premium to its acquisition price, we were also able to de-risk our portfolio given an upcoming lease expiration. The sale eliminated this near-term rollover risk and potential vacancy.”
The property totals approximately 31,000 square feet, which the REIT believes is better suited for the owner/occupier market given its smaller footprint.
Realized returns on the sale were an approximate unlevered, pre-fee 11.4 percent internal rate of return and an equity multiple of nearly 1.5 times over the four-year hold period.
The REIT said that proceeds from the sale will be reinvested to further diversify its portfolio, which includes $780 million of industrial holdings in 34 buildings across 11 markets, representing an approximate 26 percent allocation within the $3.1 billion portfolio.
Since JLL Income Property Trust’s inception in 2012, it has sold 37 properties, generating proceeds of more than $750 million.
JLL Income Property Trust (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX) owns and manages a multi-billion-dollar portfolio of apartment, industrial, office and retail properties located in the United States. The REIT has raised approximately $1.8 billion through its ongoing public and various private offerings, as well as its distribution reinvestment plan.