Case Studies > Vernon Industrial Center Vernon, CA
Vernon Industrial Center contains 483,727 SF of industrial space situated upon 22.1 acres of land located in Vernon, CA. The project consists of eight industrial buildings on four parcels constructed between 1940-80, and is rail served. Prior to acquisition, the project was 70% leased to Aerojet, Siemens, and Rehrig, with Aerojet’s lease expiring within one year.
The property was thinly marketed to only a few buyers based upon their knowledge of the Vernon industrial market and familiarity with buying environmentally impaired industrial property.
The property seller was Trimas, a manufacturing conglomerate headquartered in Detroit and the successor of Norris Industries, the original developer and user of the site since the 1940’s.
Prior to selecting Orchard, Trimas had been in escrow with three other buyers, each of whom failed to close due to the environmental and near-term leasing risk associated with the property.
The timing of the sale coincided with a downturn in the overall economy, resulting in a significantly lower price to Orchard.
Put the property under contract, and fully characterized the environmental condition of the property.
Obtained environmental insurance and established an environmental remediation reserve to mitigate the environmental risk associated with the property.
Prior to closing, renegotiated a 235,000 SF renewal of Aerojet's lease so as to secure a stable income stream for the property, but which provides flexibility for redevelopment overtime.
Evaluated various redevelopment scenarios that may be considered over time as the market warrants.
Performed due diligence and negotiated an appropriate price adjustment with seller.
Orchard Partners selected AMB Property Corporation to acquire the property, providing Orchard on-going incentive to create value at the property.