The Cornerstone Core Properties Reit has acquired a 13,200 square foot freestanding industrial building situated on approximately one acre of land in a planned industrial area of Santa Ana, California.

The property, currently 100 per cent occupied, is centrally located in the Santa Ana submarket of Orange County.

The Orange County industrial market is made up of four markets, consisting of 248 million square feet of industrial space – North Orange County, West Orange County, Airport and South Orange County.

According to the Voit Real Estate Services 1st Quarter 2010 Industrial Market Report, the Santa Ana industrial market is the Airport Area’s largest submarket with 32 million square feet. The availability rate at the end of Q1 2010 for Santa Ana was 9.51 per cent, lowest among all of the Airport Area’s submarkets.

Terry Roussel, Cornerstone’s founder, says: “What is interesting about this acquisition is that we purchased the building on a cap rate or investment basis, but our intent is to sell the property to a business on an owner-user basis at some point in the future. Industrial real estate pricing is such that business owners who want to own the real estate in which they operate pay a premium to do so. In this case, the property appraised for USD1.315m assuming sale to an investor like Cornerstone. However, the owner-user appraisal came in at USD1.525m. With this strategy, we have built in attractive property appreciation right from the beginning that is not dependent upon future rental rate increases. With the uncertainty surrounding future rental rates, taking advantage of the spread between cap rate and owner-user pricing is a creative industrial real estate strategy that provides a very comforting safety net.”