Another sign that New Mexico's commercial real estate market is recovering is the recent uptick in investment activity seen for stabilized assets. This is evidenced by this week's sale of a 30,000 square foot industrial distribution facility, situated on 3 acres of land, that is leased long-term to America's largest wholesale distributor of roofing, siding and windows, ABC Supply Company (www.abcsupply.com).
The building was owned and occupied for many years by the Joe G. Maloof Co, which utilized the facility as a wholesale beer distributorship supporting northern New Mexico and southern Colorado. ABC Supply Co moved its operations to the property, located at 2710 Sawmill Rd, Santa Fe, NM, approximately 10 years ago. With immediate access to Interstate 25, Highway 285 and a dedicated rail spur, the location is ideal for users with heavy logistics requirements.
The list price of the 100% leased property was $2,400,000 ($80 per sq.ft.) and has current a net operating income of $201,000, yielding an 8.38% cap rate. The lease was structured on a Triple Net (NNN) basis and requires very little management, a plus for the passive investor. The buyer was a group of Santa Fe-based investors who are experienced in the local market.
The Ransom-With team exclusively represented the seller in the transaction. According to Tim With, CCIM, SIOR, "Demand is active for well-located, accurately-priced assets with quality tenants. Many investors are beginning to realize that market forces are turning and they are looking to reposition capital out of low margin cash investments into tangible assets that they can leverage, depreciate and build equity through market appreciation."