SAN DIEGO-When the seller occupying a property is a credit tenant, that is a huge plus for the buyer, but the downside is they're used to doing whatever they want to the property, CT Realty's director of acquisitions Steve Provencio tells GlobeSt.com. As we recently reported, his firm has purchased the 339,264-square-foot industrial building at 12367 Crosthwaite Circle in Poway for $34 million. The property is the headquarters of Cohu, Inc.-a leading supplier of semiconductor test and inspection handlers, micro-electro mechanical system test modules, test contactors and thermal sub-systems used by global semiconductor manufacturers and test subcontractors-which will continue to occupy part of the building. We spoke exclusively with Provencio about the property and the leasing arrangement.
GlobeSt.com: What are your plans for the Cohu property?
Provencio: We plan to separate the utilities and the space to create two separate spaces that will each be fully functional.
GlobeSt.com: What are the pros and cons of having the seller occupy part of a property you have purchased?
Provencio: On the pro side, they are a credit tenant that provides income to the investment while construction is going on and a tenant is being sought. Not really a huge downside, but they are used to owning the asset and doing whatever they want whenever they want. However, thus far they have been great.
GlobeSt.com: What is your strategy for acquiring industrial properties in such a fiercely competitive market as Southern California?
Provencio: Finding an edge where CT can really apply our "bench strength." CT has architects, asset managers, contractors, development folks, attorneys and many other seasoned experts in house. The purchase of the Cohu building required use of the all of their expertise. By contrast, other investors would need to hire third parties and incur those costs.
GlobeSt.com: What else should our readers know about this transaction?
Provencio: We love the San Diego submarket. We've gotten great support from Mickey Morera, James Duncan and Bob Willingham of Kidder Mathews as well as Ted Cuthbert of Colliers.