We acquired an 8.68 acre closed landfill site. This led to a more complex entitlement process, including environmental agencies such as LEA and CIWMB, and to engineered solutions, such as a supported building foundation. Notwithstanding these environmental and engineering challenges, the tremendous upside potential compensated for the additional execution time and risk.
Located next to the busy 280 freeway, and adjacent to two successful power centers, we were able to acquire the land for less than $8/sf. As a metric, non-landfill market comparables for raw land were $25-$30/sf.
We completed a build-to-suit long-term lease deal with Home Depot and worked closely with all local and state agencies to achieve project approvals. Highlights include a foundation supported by 93,000 linear feet of piles, a two-story parking structure for 543 spaces, and an 116,434 sf Home Depot store.
This Home Depot development exemplifies our risk-adjusted approach to real estate. We are hands-on owners/operators and are attracted to projects that require more than proforma development activity. By leveraging our hands-on approach we are able to achieve higher than normal risk-adjusted returns.
We sold the project in 2003 for $33,275,000, or $286/sf. At the time of sale, the store generated Home Depot’s second highest sales psf in North America.