New Deal Offering: Sacramento, CA
We are pleased to announce that we have placed 1441 Richards Blvd, a two building IOS/automotive property in Sacramento, California, under contract. The purchase price is $5.25 million (total anticipated project cost is $6.02 million), and we are raising $2.7 million in LP equity. We expect to close in mid-September. Given the deal’s compelling return profile, we anticipate the remaining $1.0 million in equity commitments to be subscribed quickly.
The property is located in Sacramento’s infill Richards Blvd corridor, adjacent to downtown and less than one mile from the 244-acre Sacramento Railyards redevelopment. This deal came to us off market after the previous buyer fell out of contract. We were able to step in at the same below market price and move quickly to secure the asset.
1. Clear Value Add Business Plan: One of the two tenants is currently on a month-to-month lease, and we plan to offer them a term lease prior to closing. If they do not accept, we will immediately begin marketing their space for lease. The other tenant’s lease runs through the end of 2027. Both tenants are paying significantly below market rents, giving us a clear path to creating value through lease up and mark to market renewals. At stabilization, we anticipate achieving a 9.9% yield on cost.
2. Strong IOS Fundamentals: The Richards Blvd submarket is one of the most supply constrained industrial corridors in Sacramento, and redevelopment is steadily reducing available IOS. Sacramento’s industrial market remains strong with a 5.4% vacancy rate and rising rental rates, while the Richards submarket specifically recorded a vacancy rate of just 2.0% as of Q2 2025. The property sits within the River District Special Planning District, which allows for a wide variety of commercial and industrial uses, including nonconforming uses. This flexibility makes it highly attractive to IOS, equipment rental, and automotive tenants. Neighboring tenants include FedEx, Cresco Equipment Rentals, and several major automotive and construction supply companies.
3. Priced Well Below Market: We are acquiring the property at a substantial discount to recent trades in the market, at just $125 per square foot for the building and $21 per land square foot. Comparable sites have sold for upwards of $45 per land square foot.
4. Compelling Returns: Even under conservative assumptions – including 52% LTV financing and an 8.0% interest rate – we project a 24.2% gross IRR and 2.25x equity multiple over a four year hold period. LP investors are projected to receive a 20.4% net IRR and 2.01x multiple. Our exit cap is set at 6.25%, and we assume no change in industrial cap rates.
