Steel Peak, a commercial real estate investment firm specializing in industrial outdoor storage (IOS) properties, has successfully sold a 12,000-square-foot IOS property in El Cajon, California, for $9.5 million. The property, located at 1324–1336 Magnolia Avenue, was purchased by C&M Manufacturing, Inc., a company that will utilize the site for its operations in the oil and gas industry. This transaction represents a significant profit for Steel Peak, which acquired the property just months earlier in February 2024 for $6.3 million.

The firm’s strategy involved transforming the property from a rundown multi-tenant yard into a highly functional IOS site. Key improvements included demolishing dilapidated structures, preserving useful buildings, and implementing comprehensive upgrades such as new paving, fencing, and both interior and exterior enhancements. These changes not only improved the site’s functionality but also its appeal to potential tenants, culminating in its sale to a long-term owner-user.

Blake Rodgers, Co-Founder of Steel Peak, highlighted the transaction as evidence of the strong demand for well-located IOS properties in Southern California, particularly those serving contractors and construction-related businesses. Pasha Johnson, another Co-Founder, noted the aggressive pursuit of high-utility sites by owner-users, driven by the scarcity of entitled IOS properties and increasing competition for prime locations.

The property at 1324–1336 Magnolia Avenue offers approximately 2.5 acres of space, including warehouse, office, and outdoor storage areas, with M-54 zoning and entitlement for outside storage. Its features, such as multiple access points and a level fenced yard, make it an attractive option for businesses requiring IOS solutions.

This sale not only demonstrates Steel Peak’s ability to identify and capitalize on undervalued assets but also reflects the broader trends in the IOS market, where strategic improvements can significantly enhance property values. Steel Peak continues to seek similar investment opportunities across the Western U.S., aiming to replicate this success in other markets.

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