ALTO’s 27th Exit: ALTO Real Estate Funds and Milan Capital Management Sell a Medical Office Building in San Diego, CA for $17 Million

The partners doubled the equity invested in the transaction

SAN DIEGO--(BUSINESS WIRE)--ALTO Real Estate Fund and Milan Capital Management have sold Pomerado Professional Plaza – a medical clinic complex in a suburb of San Diego, CA, USA – for approx. $17 million, representing a 5.8% cap rate. The property was sold to a US-based REIT investing in medical properties. The sale price resulted in a doubling of the equity invested in the transaction.

In these unstable times, with the real estate market practically at a standstill, this transaction stands out especially since it was closed at the same price agreed to in February (prior to the COVID-19 crisis).

The 46,183 SF property was purchased in August 2015 for $9.5 million at an occupancy rate of 55%. The business plan was to significantly upgrade the property with an extensive renovation, followed by pursuing an aggressive lease-up strategy. The property’s occupancy dramatically increased to around 90% prior to its sale.

Chris Nichelson, President at Milan Capital: “We thank our investors for placing their trust in us in these challenging times. We keep monitoring and analyzing the US market, and are continuing to see unique opportunities for value-add investing. Thanks to the asset’s location, our massive renovation, and our great working relationship with ALTO, we succeeded in finalizing the transaction to the satisfaction of all parties involved”.

About Milan Capital Management:

Milan is a commercial real estate company that owns, develops and manages commercial and residential properties, primarily in southern California. Founded on the principles of value-oriented investing and proactive management, Milan has proven its expertise as an investment real estate owner and operator since the early 1980s.

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ALTO Fund II was established in February 2014 and raised $137 million. ALTO Fund II is part of the ALTO Real Estate Funds, which have been operating for 11 years. During that time ALTO has raised around $330 million in three different funds.

ALTO has invested in 63 properties with a total value of $1.2 billion and a total area of 12 million SF. The Fund has made 27 exits to date. ALTO Real Estate Funds’ investment strategy focuses on investment in open-air shopping centers and logistics properties in 12 fast-growing markets in the US.