1441 Montiel Road, Escondido

INVESTMENT HIGHLIGHTS

CASH FLOW PROTECTION | NEAR TERM UPSIDE Currently 86% leased, with no tenant occupying more than 34.8% of the Project, 1441 Montiel’s ideal multi-tenant design eliminates concerns from a large all-at-once vacancy exposure protecting cash flow and net operating income. Additionally, a new investor will be able to capture near term upside with 14% of the project vacant and in place rents approximately 9.3% below current market rents in a market with 2.2% vacancy. This is especially advantageous in a market that is experiencing continuous tenant demand, limited leasing options and an anticipated spike in rental rates. OUTSTANDING MARKET DYNAMICS The Escondido industrial market is one of the strongest and most dynamic industrial markets in San Diego County. Consisting of 6,913,435 square feet, the Escondido industrial market has one of the lowest vacancy factors in all of San Diego County at 2.2%. By comparison, it has a lower vacancy factor than the averages in all of San Diego County and North County, which total 4.4% and 5.1% vacancy respectively. Since 2013, the Escondido industrial market has experienced a 73% increase in rents while remaining in single digit vacancy. FANTASTIC LOCATION 1441 Montiel is strategically located at the northwest corner of Interstate 15 and Highway 78. This junction is the confluence of the two main freeways serving North San Diego County. Being centrally located on both Highway 78 and Interstate 15 Freeways, Escondido serves as the gateway to North County for commercial trade, servicing areas as far North as the Inland Empire/ Riverside County and South to the Mexico Border. Escondido also serves as one of the largest retail hubs in North County, boasting one of the highest sales tax per capita in the County. The amenity rich trade area includes national retailers surrounding the site such as Costco, Wal-Mart, Kohl’s, Starbucks, McDonald’s, Taco Bell, Hooters, Jersey Mikes, Verizon, Temecula Valley Bank and Navy Federal Credit Union. In close proximity is the famous Stone Brewery World Bistro and the 740,000 sf, 11-story, Palomar Medical Center West. The project is also near a North County Transit Station (Nordahl Road), where the Sprinter light rail line travels from Escondido through San Marcos and Vista to Oceanside. The rail line then travels north via Amtrak and Metrolink and south via the Coaster and Amtrak. The North County Transit Station also offers bus services. HIGH BARRIERS OF ENTRY & ESCALATING RENTS The Escondido industrial market offers very few sites for future development. The Escondido Research and Technology Park was to be the area for industrial expansion. However, a significant portion of that land has been developed as medical and build-to- suit projects. Those projects include a total of 1,753,588 square feet. The breakdown of those projects include: 740,000 square foot, 319 bed, Palomar Hospital, two (2) multi-tenant medical buildings totaling approximately 135,000 square feet and another planned multi-tenant medical building of 75,000 square feet, a 15,000 square foot Davita Dialysis building, Stone Brewery’s corporate headquarters within two (2) buildings totaling approximately 110,000 square feet and Corovan’s 90,000 square foot facility. Additionally, Vertiv recently occupied approximately 212,088 square feet at 1925-2005 Harmony Grove, which represents one of San Diego County’s largest lease transactions. There is currently 376,500 square feet of projects that are either under construction or planned for construction. Of this total, approximately 273,000 square feet is pre-leased to Stone Brewery. Only 103,500 square feet is not currently preleased. This incredible amount of activity demonstrates the high barriers of entry to the Escondido market and the effect it will continue to have on rents.

OFFERING MEMORANDUM

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