11270 & 11280 Sanders Drive, Rancho Cordova, CA
Value-Add and Infill Industrial
Acquired in December 2023

Two identical 21,835 SF warehouse buildings (total of 43,670 SF) on 126,324 SF (2.90 acres) of land; 35% coverage

The property sits in a convenient Rancho Cordova location, just off busy Sunrise Boulevard, across the street from Costco, less than 2 miles from Highway 50, approximately 15 miles from downtown Sacramento, 25 miles from the Sacramento Airport, and 100 miles (less than 2 hours during off-peak hours) from San Francisco.

While the purchase price was attractive at approximately 50% of replacement cost, it is not necessarily heavily discounted from market. Still, all 7 tenants at the property are paying rents that represent approximately 60% of market rates and 6 of the leases expire during the first 2 years of ownership, indicating significant cash flow upside.

The two buildings were constructed in 2001 and 2003 and are in excellent shape with very limited deferred maintenance. Further divisibility is possible, leading to important flexibility in terms of ability to lease to various sized companies. Attractive amenities include high clear heights (22’-24’), air-conditioned warehouse space, and 16 large grade-level doors (12’x14’), enough to accommodate many more tenants if needed.

Sacramento continues to be an attractive place to live and work, due to lower costs versus the Bay Area. Industrial rent growth continues, as vacancy rates remain low. While there has been a meaningful amount of warehouse development in Sacramento, it is almost entirely “big box” properties, rather than small “incubator” units. It simply does not make economic sense to build multi-tenant properties with small spaces, given that rents have not caught up with rising development costs. Thus, we expect continued upside to rental rates at our property.