Case Study: Pacific Business Park – Pacific, WA
- AGM REAL ESTATE
- Apr 27
- 2 min read
In 2023, we acquired Pacific Business Park, a 42,244 SF multi-tenant industrial incubator park comprised of 30 tenants. Positioned in a high-demand submarket, our strategy focuses on enhancing cash flow through rental rate adjustments to market levels and implementing triple-net lease (NNN) structures.
INVESTMENT SNAPSHOT
Phase: In Progress
Location: Pacific
Property Type: Industrial
Size: 42, 244 SF
Acquisition Date: 2023
Purchase Price: $8,200,000
Equity Raised: $4,775,000
Strategy: Value Add
INVESTMENT THESIS
Industrial Incubator Demand: Small-bay industrial spaces remain among the most resilient asset classes, with surging demand from local businesses, contractors, and service providers seeking functional, affordable space.
Rent Repositioning: Rents at acquisition were materially below market, creating an opportunity to systematically increase in-place rents to market levels upon lease renewals and new tenant rollovers.
Triple-Net Conversion: By transitioning leases to NNN structures, we aim to shift operating expense responsibility to tenants, increasing net operating income and enhancing asset value.
High Barriers to Entry: Scarcity of developable industrial land and rising construction costs in the Pacific submarket reinforce the long-term value of well-located existing assets like Pacific Business Park.
CURRENT STATUS
Leasing and Renewal Strategy: Active lease renegotiations are underway to capture market rents and transition leases to NNN where feasible.
Capital Improvements: Targeted property enhancements, including parking lot upgrades, exterior repairs, and signage improvements, are in process to support higher leasing velocity and tenant retention.
Tenant Demand: Robust interest from local businesses continues to support leasing assumptions and reinforce the market's depth for small industrial units.
Exit Potential: Upon stabilization, options include refinancing to return investor capital, holding for continued cash flow, or disposition to an institutional or private industrial investor seeking stabilized yield.
