Beverly Hills-based Dunleer has purchased a handful of industrial properties as part of its push toward owning more properties in the sector.
“Prior to the pandemic, we had already started to acquire industrial assets because we saw a few things happening in the industrial market, particularly in Southern California, which was the continued penetration of ecommerce and the need for industrial and…the difficulty of adding industrial supply,” BJ Turner, founder of Dunleer, said. “Covid only accelerated things from a demand perspective.”
Roughly three-quarters of the company’s portfolio is now industrial assets, compared to roughly one-third before the pandemic.
Because of the pandemic, Turner said, some companies are bringing more manufacturing back from overseas. These firms occupy space in industrial warehouses. Some cannabis makers and ghost kitchens have expanded into industrial properties as well.
Other firms, he said, are responding to supply-chain issues by making sure they have more inventory on hand.
“Each tenant now needs more space to manage their inventory,” Turner said.
Dunleer’s most recent acquisitions in Southern California, which total $12.4 million, are located in Santa Ana, Covina and San Bernardino.
The Santa Ana asset, which was built in 1965, is a 24,400-square-foot property located at 2222 to 2308 W. 2nd St.
Dunleer plans to make improvements to the complex.
The company also acquired a 31,688-square-foot property at 1165 E. Edna Place in Covina; it was completed in 1962.
“This was a building that was delivered vacant without a tenant in there,” Turner said.” It really appealed to us, because in Los Angeles County right now its a remarkable stat that there’s less than 1% vacancy. When you actually have a vacancy, it means a tremendous amount. There’s a lot of tenants right now looking…To be able to buy a building that has vacancy…it’s a very, very good thing.”
Turner said the company would make some improvements to the site including adding gating and improving its functionality before leasing it.
The San Berardino asset, at the southeast corner of Cajon Boulevard and June Street, sits on a 4.6-acre parcel that Dunleer will entitle for development.
And Turner said the company was interested in other industrial assets as well. Beyond growing its industrial portfolio, the company is also doing more with lending and solar energy.
For lending, the company is generally offering quick turnaround bridge loans, but is doing some other loans as well.
The company also has a platform with which it purchases rooftop solar panels and leases them back to homeowners.
“Those are a couple of business lines that we were able to build on as Covid progressed,” Turner said. “We’ve continued to do both.”
Dunleer is working on its solar fund for the year.
The company has also continued investing in the multifamily sector, largely out of state.
“In this rising interest rate environment, we continue to be relatively bullish on multifamily because of the fact that it is going to make homeownership more and more difficult and will lead to continued demand for rentals across the country,” Turner said. “Multifamily remains a focus, but industrial is the primary focus.”
Going forward, Turner sees continued growth for the company as he continues to “scale our organization and remain bullish both with industrial and apartments and (we) want to scale up to build our platform but remain nimble and adaptive to the market conditions.”