The VSR Portfolio 6 Properties Offered at $25,000,000 in Multiple Locations

CBRE, Inc. is pleased to offer a stabilized six building light industrial portfolio totaling ±159,884 square feet in the high-demand locations of Roseville, Rocklin and West Sacramento.
The properties are in immaculate physical condition and have been professionally managed. New construction of this product type is almost non-existent and the inventory that is under construction will post asking rents which are approximately 250% higher than the Subjects’ rents in place and significantly higher than the market rents that we have projected for this portfolio as leases in place migrate upward. Our base case thesis is that given the nature and quality of the Subjects’ improvements, their centralized locations in the best micro markets in the region and the literal paucity of available space, let alone available space of this quality, moving rents in place to market while still staying below the necessary asking rents mandated by expensive new construction, will allow meaningful income appreciation with little to no risk of vacancy loss. Our financial underwriting and submarket summaries which follow hereinafter will expand upon our thinking in this regard.
The Opportunity is priced at $25,000,000. Tenant suites are 93.2% leased as of July, 2025. There is one remaining available space at 859-1 Stillwater Road in West Sacramento of 10,872 sq. ft. which Owner expects to have leased by September. Historic occupancy has been at or about 100% for years. If and when a tenant has departed the Owner’s experience has been that the vacated space is released promptly and at little cost given the fungible, high quality nature of the improvements on a portfolio-wide basis.
The offering price equated to $156 per square foot with a year one capitalization rate of 6.11%. Our projections attendant to the first increase of rents in place to market as each lease reaches its expiration date suggests a mark-to-market capitalization rate of 7.26%. Our 10 year discounted cash flow analysis (Argus) that assumes both an 85% probability of renewal and a sale of the portfolio after 10 years projects an unleveraged annual IRR of 10.09% and a leveraged return of 13.63%.
We estimate replacement costs for the six buildings to be $292 per square foot to $383 per square foot. (Third party replacement cost analyses are included in our due diligence site; please email brokers to obtain the link.) In many instances, especially with respect to office buildings in today’s world, replacement cost is irrelevant in the absence of tenant demand. However, with respect to light industrial inventory the long term demand is real, vacancy rates are exceedingly low and new developments are warranted. Mitigating or limiting factors include the escalating costs of available, well-located land, high material and labor numbers and slow entitlement and permitting time frames. All serve to meaningfully drive up the costs of new construction, making existing projects not only more valuable but allowing more modest rents in place significant room to run as leases in place expire and become ripe for renewal.
While our estimates of where rents may climb on the first round of increases appears fair and reasonable, the asking rents for the few projects presently under construction suggest that our figures may in fact be low. For example, in the Roseville/Rocklin submarket Schnitzer Properties is under construction with two multi-tenant light industrial buildings (80,080 sq. ft. divisible to 5,720 sq. ft. and 109,200 sq. ft. divisible to 7,800 sq. ft.). Each demised space has dock and grade level loading at a base asking rent of $1.30 per sq. ft./month, plus NNN. We have suggested that the Roseville/Rocklin components of this portfolio will garner first round rents in the $1.05-$1.20 per sq. ft./month range plus NNN.