Owner tenants are beginning to get feel crash-fever and are attempting to sell their real-estate aholdings. A good example is Printronix of Irvine California. Printronix is a manufacturer of printers, bar coders, and other business inventory solutions. With revenues of $127 million, this business is based in a sprawling 539,316 sqft campus in Irvine, California.
Either way this property represents a continuation of the ridiculousness of southern california
Gentleman, when will the silliness stop???
The property, while held by a shell company, has recently been posted for sale at a price of $40 million, a 100%+ premium over it's assessed value of $19 million.
There's several interesting aspects of this property. Firstly, in a brilliant move by the Printronix CEO, the company was acquired in late 2007 by Vector Capital - just months before the US officially entered a recession. Furthermore, Printronix is not moving, they are promising a 7 year NNN lease to any purchaser.
Since it is apparent that Vector Capital completely missed recessionary warnings by making big acquisitions late into 2007, it is questionable whether Vector Capital perceives a CRE bust in 2009 or is simply raising cash for other operations as credit tightens.
Either way this property represents a continuation of the ridiculousness of southern california
commercial real estate. With a NOI (net operating income) of approximately $2.8 mil, the asking price of the property represents a 7% cap rate. With today's interest rates in order to maintain a 1.25x DSCR, investors would have to poney up a whopping 35% downpayment ($14 mil)
Gentleman, when will the silliness stop???
Because of its relative size and the players involved, this property is definitely one to keep an eye on.
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