6965 & 7005 LUTHER DRIVE, SACRAMENTO, CA (LUTHER INDUSTRIAL PARK)
VALUE-ADD AND INFILL INDUSTRIAL
ACQUIRED IN FEBRUARY 2023

20,412 SF warehouse and 15,842 SF warehouse (total of 36,524 SF) on 96,643 SF (2.20 acres) of land; 38% coverage

Attractive Sacramento industrial locale, 1.3 miles from Highway 99 on/offramps in both directions and approximately 7 miles south of downtown Sacramento, 18 miles from the Sacramento Airport and 92 miles from San Francisco.

Acquired at a low basis, due to in-place rents that are approximately 35-50% below market rates. All ten leases expire within three years of purchase, leading to significant future upside in revenue and cash flow.

While constructed in 1985, the two buildings have been well maintained by original developer and have very limited deferred maintenance.

Despite new construction, Sacramento continues to experience low industrial vacancies, given high demand. We do expect ongoing warehouse development in coming years, warranted by the growing attraction of Sacramento for residents and businesses, bolstered by remote work trends, relative costs of living, the Highway 80 and 50 locations and proximity to Lake Tahoe and the Bay Area. Still, with few exceptions, new construction in Sacramento is of bigger box properties that cannot be divided into smaller spaces like ours in the 1,000-7,000 square foot range. Small units require relatively high additional costs, including separate utility meters, plumbing in each space, and added structures (walls, offices, etc.) that make related development not feasible at this time.