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 were approximately 35-50% below market rates. All ten leases expired within three years of purchase. Renewals and re-leasing has led to a significant increase in cash flow and refinancing of an expensive private loan.

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

While there is construction of "big box" warehouse properties in Sacramento, there has been no development of smaller units comparable to Luther. It is simply too expensive to build "incubator" industrial space versus larger space. Small units require relatively high additional costs, including separate utility meters, plumbing in each space, and added structures (walls, offices, etc.). The rents at this time do not justify development. This should allow for a well-occupied Luther property for years to come. Sacramento continues to be an attractive locale 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.