Galaxy Wayco · Deal Intelligence
Lincoln Heights Industrial
Industrial Portfolio
Industrial Portfolio
A rare Downtown-adjacent industrial portfolio spanning multiple legal parcels with frontage on two streets and immediate access to the 5 and 110 freeways. Located one mile east of Dodger Stadium and two miles northeast of Downtown LA's CBD, the property sits within the 3.9M SF Lincoln Heights industrial submarket. The buildings feature heavy electrical power (3,000 amps, 277/480V), a gantry crane, 8 ground-level loading doors, 141 parking stalls, and concrete/asphalt yards with street-to-street access.
Seller's asking price: $19.8M (land) + ~$3.0M (business) = $22.8M total ask. Target acquisition price: $15.0M–$16.0M for the real estate, with the business acquired at or near cost — achievable because buying both assets simultaneously gives the buyer significant negotiating leverage and simplifies the seller's exit. Client strategy: Occupy approximately 30,000 SF for own use; subdivide and lease the remaining ~83,609 SF across 12 suites (3,000–14,000 SF each) at a blended $18.50/SF/yr. Stabilized gross revenue projected at ~$1.55M annually — representing an 8.1% cap rate on the $15.5M RE basis at base case, plus $540K/yr in avoided lease cost on the owner-use space.
As of Q2 2024, average asking rents in Lincoln Heights industrial have risen 38.5% over the past decade, reaching $1.08/SF/month ($12.96/yr) on a modified gross basis across the full submarket. That average is weighted down by large single-tenant blocks. The leasing comp data from a 1-mile radius shows that mid-size industrial units (5,000–15,000 SF) consistently achieve $18.00/SF/yr — a rate supported by 8+ direct comparables. Vacancy dropped 74.2% year-over-year in the most recent quarter, reflecting extremely tight supply conditions favorable to landlords.
| Signed | Address | SF | Type | Rent/SF/Yr | Services | Rent Type | Tenancy |
|---|
Large blocks (20,000+ SF): $11.76–$16.20/SF/yr avg. Larger spaces command lower rates per SF as expected.
Mid-size blocks (10,000–20,000 SF): $15.00–$18.00/SF/yr. The subject's leasable inventory will likely be divided across this range.
Smaller units (3,000–10,000 SF): $18.00–$29.40/SF/yr. Smaller configurations consistently achieve $18+ with strong support from multiple comps.
Conclusion: $18.00/SF/yr is well-supported for the subject's mid-size unit configurations. A blended rate of $16–$18/SF/yr across the leasable portfolio is a defensible underwriting assumption.
| Metric | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 |
|---|---|---|---|---|---|
| Gross Revenue | — | — | — | — | — |
| NOI | — | — | — | — | — |
| Debt Service | — | — | — | — | — |
| Cash After Debt | — | — | — | — | — |
| Owner-Occ Rent Income | — | — | — | — | — |
| Total Cash After Debt | — | — | — | — | — |
| Suite Tier | Count | Avg SF / Suite | Total SF | Rent / SF / Yr | Annual Revenue |
|---|---|---|---|---|---|
| Large (9,000–14,000 SF) | 4 | 9,500 | 38,000 | $17.00 | $646,000 |
| Mid (5,000–8,000 SF) | 5 | 6,000 | 30,000 | $19.00 | $570,000 |
| Small (3,000–5,000 SF) | 3 | 5,203 | 15,609 | $21.00 | $327,789 |
| Total / Blended | 12 | 6,967 avg | 83,609 | $18.50 blended | $1,543,789 |
At a targeted $15.5M ($136/SF), this acquisition is likely at or below replacement cost for comparable LA industrial \u2014 and far below the Seller's $19.8M ask. Bundling the real estate with the business acquisition gives the client meaningful negotiating leverage. The suite-subdivision strategy transforms a single-tenant risk profile into a diversified multi-tenant income stream: 12 planned suites at $17–$21/SF yield a blended $18.50/SF. The property's hard-to-replicate attributes \u2014 3,000A heavy power, gantry crane, concrete yards with street-to-street access, 141 parking stalls, and immediate I-5/SR-110 access \u2014 support above-market rents and long-term land value appreciation.
| Address | APN | Bldg SF | Land SF | Notes |
|---|---|---|---|---|
| 153 N Ave 21 | 5447-014-017 | — | 8,250 | Covenant to hold together |
| 154 N San Fernando Rd | 5447-014-040 | 15,370 | 14,812 | Covenant to hold together |
| 158 N San Fernando Rd | 5447-014-020 | 4,032 | 7,635 | Covenant to hold together |
| 147 N Ave 21 | 5447-014-016 | — | 7,755 | Covenant to hold together |
| Subtotal Green Parcels: 19,402 SF bldg · 38,452 SF land | ||||
| 141 N Ave 21 | 5447-014-038 | 14,670 | 15,510 | 9,780 footprint + 4,890 2nd floor |
| 137 N Ave 21 | 5447-014-013 | 14,482 | 7,755 | — |
| 131 N Ave 21 | 5447-014-012 | 14,482 | 7,755 | — |
| Subtotal Orange Parcels: 43,634 SF bldg · 31,020 SF land | ||||
| 140 N San Fernando Rd | 5447-014-023 | 7,319 | — | — |
| 136 N San Fernando Rd | 5447-014-025 | 14,245 | 12,458 | 11,935 footprint + 2,310 2nd floor |
| Subtotal Blue Parcels: 19,777 SF bldg | ||||
| 121 N Ave 21 | 5447-014-010 | 14,564 | 7,755 | — |
| 127 N Ave 21 | 5447-014-011 | 14,564 | 7,755 | — |
| 114 N San Fernando Rd | 5447-014-028 | 7,318 | — | — |
| 118 N San Fernando Rd | 5447-014-027 | 7,318 | — | — |
| Subtotal Yellow Parcels: 29,128 SF bldg · 30,146 SF land | ||||
| 122 N San Fernando Rd | 5447-014-026 | 7,200 | 9,498 | Pink parcel |
| TOTALS | 113,609 SF | 128,893 SF | ||