A prolific investment year for Campbell-based GPR Ventures concluded with the acquisition of about 200,000 square feet of commercial buildings in one Sacramento County property.
Escrow closed Dec. 31 for Franklin Business Park at 7000 Franklin Blvd., with GPR paying $11.675 million for the 11-building property of both office and industrial structures.
“That’s really what’s tremendous, to be able to get this at significantly below replacement cost,” said Phil Rolla, a co-founder and managing principal at GPR. “We’ll renovate it to a GPR standard.”
Rolla said GPR plans to spend about $3 million on upgrades at the property, which was built in the mid-1970s. The improvements will include exterior renovations such as new landscaping, and some interior upgrades to common areas.
Also, some current office buildings will be converted to light industrial, taking a 50-50 ratio of office to industrial buildings in the park to about 80-20 in favor of industrial, Rolla said. A team of industrial brokers, including Matt Susac and Todd Sanfilippo of CBRE Sacramento, will head up future leasing to reflect the new emphasis, Rolla said.
At the time of sale, occupancy was about 56%. But Rolla said that was up from 44% when GPR went into contract to buy, and CBRE’s brokers are bullish on more activity. He said he believes it’s possible occupancy will be at 90% or better by the end of 2021.
To get there, brokers will target general contractors and firms connected to automotive uses, as well as support services for residential properties, according to GPR.
“Our brokers feel like with the vacancy it has, it has a significant amount of demand,” Rolla said, adding the property will also benefit from more on-site management, with GPR’s regional office a few minutes away. “We’ll have someone there daily.”
Franklin Center Business Associates, with an address in San Francisco, appears to be the seller in the deal. Intereal Corp., which is at the same address, did not return a message left for comment Tuesday.
Rolla said he’d describe the property as undermanaged in recent years.
“We’ll implement a little GPR magic,” he said. “By the time it’s stabilized, it’ll be offering a very competitive rate.”
The deal was GPR Ventures’ 27th acquisition, with three last year in the Sacramento region after four local ones in 2019. Just before Franklin Business Park, GPR closed escrow on a 331,000-square-foot warehouse in Reno and a 49,234-square-foot warehouse in Utah. Both were its first purchases in those areas.
“We continue to focus on expanding in the Western U.S.,” Rolla said. “This will not be our last acquisition.”