Kelly Street Industrial Campus

As exclusive advisor, Colliers International is pleased to offer for sale on a free and clear basis a fully-leased industrial investment opportunity in Lodi, California. The “Property”, Kelly Street Industrial Complex, includes five main manufacturing buildings totaling 120,255 square feet. The campus is situated on four (4) separate legal parcels and is ideally located in the heart of Lodi’s industrial market. The Lodi industrial market is incredibly tight, servicing the local wine and agriculture economy, manufacturing and local/regional distribution needs and consists of approximately 11.3M square feet with a vacancy rate consistently sub 2.0%. The Property, which benefits from immediate access to Highway 99 is 100% leased to Heartland Steel, a subsidiary of Heartland Steel Products, LLC, on a modified net lease through 12/31/2035. SpaceRAK, a manufacturer of storage rack systems and a division of Heartland Steel relies on the subject property as its’ only West Coast manufacturing facility. Given Heartland Steel’s historical occupancy of the subject building (original occupancy 2011), long remaining lease term (136 months), annual rental increases based upon the greater of (a) 103% of the base rent of the preceding calendar year, or (b) the corresponding increase in the Consumer Price Index (CPI) for the preceding calendar year and mission-critical use of the Property, this offering presents an investor with the opportunity to enjoy stable cash flow for many years.
The asset is offered for sale priced at $15,200,000 or $126.40 per square foot. The price equates to a capitalization rate of 7.02% on actual net operating income. The lease is modified net because the tenant is responsible for all operating expenses except the structural and mechanical components of the Property.