Mesa manufacturing, distribution building trades hands in sale-leaseback deal

A Los Angeles real estate firm sees big possibilities in Phoenix and has made its first acquisition in the East Valley.

DWG Capital Partners acquired AirBagIt’s 72,780-square-foot manufacturing and distribution building in Mesa in July for nearly $10 million. The deal was structured as a sale-leaseback so Valley-based AirBagIt will continue to operate at 260 S. Hibbert Street in Mesa near Broadway Road and north of U.S. 60 under a new, triple-net 18-year lease.

“With industry migration to Phoenix surging, high demand for industrial facilities is producing the kind of more compressed and lower exit cap rates that make it one of the most appealing investment opportunities in the market,” said Judd Dunning, DWG Capital’s president and founder, in a statement. “We are thrilled to acquire stand-out real estate in a dense, urban infill and burgeoning opportunity zone location, as well as provide services to a seasoned American manufacturer.”

The building, which sits on 1.9 acres, features 17-foot ceiling heights, three docks, one drive-in dock and three external dock levelers for the custom automobile parts company that has been in business since 1987, according to a news release.

Glen Miles, managing partner of Calgary, Canada-based Miles Capital Partners, represented AirBagIt in the deal, according to the release. Mountain America Federal Credit Union was the lender, according to real estate database Vizzda.

The acquisition contributes to DWG Capital’s nearly $50 million industrial profile, which expands across California and into Arkansas, South Carolina, Ohio and Texas, according to its website. In addition to its Los Angeles headquarters, DWG Capital also has an office in Fort Worth, Texas.

While the deal was DWG Capital’s first in Mesa, the company already has a presence in the Valley as Dunning’s firm bought 3420 W. Catalina Drive in Phoenix in early 2022 for $5 million, according to Vizzda. That deal was also structured as a sale-leaseback with countertop and stone fabrication company Rembrandt Stone Masters.

“We continue to target strong markets with an acquisition strategy that provides our investors with stable, long-term ROI while helping capitalize best-in-class companies positioned to grow,” said Dunning in a statement.

In the second quarter, CBRE Group Inc. said it was tracking more than 45 million square feet of tenants looking for industrial space in the metro area. The Valley also had a 3.4% vacancy rate with more than 50 million square feet of space under construction in Q2.

Leave a Reply

Your email address will not be published. Required fields are marked *