An industrial building in Costa Mesa’s designated marijuana business district has sold for $2.5M.
An undisclosed buyer purchased the 7,718 SF industrial building at 3505 Cadillac Ave. Unit F-5 in the Cambridge Business Park from a private seller, according to Advisors Commercial Real Estate’s Michael Dorsey and Stephen Madigan.
Dorsey and Madigan represented both seller and buyer.
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Upon completion of the sale, the new owner secured a seven-year lease with a medical cannabis company, Dorsey said in a news release.
“As an unlisted property, initially the challenge was finding an investor who understood the cannabis leasing market and was willing to risk purchasing an empty building,” Dorsey said. “Fortunately, our connections enabled us to find an investor with the industry knowledge and appetite for risk, and the new owner is now seeing a double-digit cap rate for the first year.”
Since the passage of the city’s Measure X in November 2016, sales of industrial buildings within the area have been very active.
Measure X allows medical marijuana businesses that focus on research, manufacturing, testing and wholesale distribution to operate within a designated zone. The city has given 17 conditional use permits for the operation of marijuana businesses in the area.
The city has previously said the concentration of marijuana businesses within the zone would allow cannabis companies to work together and improve security.
Last year, at least three properties sold at the Cambridge Business Park, which is within the zone. The 4,800 SF M101 and 4,734 SF M104 units were sold on May 15, 2017, for an undisclosed price.
Unit A, a 5,784 SF industrial lot, sold for $2.55M in August. It is unclear if all of these units will operate a medical marijuana business, according to records on the Realtors Property Resource.
CORRECTION, MAY 17, 2:10 P.M. PT: A previous version of this story had the name of the brokerage that handled the sale wrong. Michael Dorsey and Stephen Madigan are with Advisors Commercial Real Estate. The story has been updated.
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