.jpeg)
Case Study
2319 E Locust Court, Ontario
When the user sale fell through, we found the investor who could see the value.
Today's market rewards vacant buildings that owner-users can move into. This building was marketed that way. Then the tenancy status became uncertain, and the property needed capital work. We changed course, found the right buyer and closed all cash.
Key results
$7,750,000
Sale price
All cash
Purchase
7-year
New lease
62-day
Escrow
At a Glance
Deal snapshot
| Property type | Industrial building |
|---|---|
| Building size | 37,146 SF |
| Submarket | Ontario, Inland Empire West |
| Sale price | $7,750,000 ($209/SF) |
| Buyer type | All-cash private investor |
| Representation | Seller and buyer |
| Lease at close | New 7-year lease at market rent |
| Escrow period | 62 days |
| Closed | September 30, 2026 |
The Problem
The challenge
The seller wanted a clean exit. With the tenant understood to be month-to-month, we marketed the building as a vacant user sale, the highest-value path in today's market.
That changed during the first escrow. Once the estoppel process began, the tenancy status became uncertain. A user buyer needs certainty of possession, and that escrow ended.
The property also needed work. A section of the building contained unpermitted improvements that had to be either permitted or removed. The roof, asphalt and paint carried deferred maintenance.
The seller did not want to take on the time, capital or uncertainty needed to stabilize the building. They wanted to sell and complete a 1031 exchange into a stable asset. We needed a buyer who was comfortable taking that on.
The Approach
The strategy
Reposition for an investor.
We took the building to every active investor in the market and worked our proprietary database. A deal like this does not fit a typical investor buy box. It has occupancy questions and capital needs. The goal was to find the buyer who could see past those issues and still pay strong investor pricing.
Price the risk honestly.
The gap between vacant user value and investor value came down to cost, time and risk. Removing the unpermitted improvements was a real expense. It also meant downtime, permitting timelines and a vacancy factor. The roof, asphalt and paint added more. Every known issue was reflected in the price from day one, so nothing became a renegotiation in escrow.
Recommend highest and best use.
We advised removing the unpermitted improvements rather than permitting them. That returns the building to its highest and best use of roughly 95% warehouse and 5% office, the layout industrial users and investors value most.
Turn uncertainty into a lease.
Once a committed buyer was in place, both sides wanted clarity. The buyer and tenant worked out a new 7-year lease at market rent. An uncertain occupancy became a long-term income stream.
Represent both sides with full disclosure.
We represented both the seller and the buyer, with an equal duty to each. Every known issue, the key due diligence items and the buyer's business plan were on the table before escrow opened.
How It Unfolded
Timeline
October 6, 2025
Listing assignment
January 16, 2026
First escrow opens with a user buyer
About 45 days later
User escrow ends during the estoppel stage
Spring 2026
Repositioned to the investor market
July 30, 2026
Second escrow opens with an all-cash private investor
September 30, 2026
Closed and recorded
The Result
The outcome
- $7,750,000 all-cash sale ($209/SF)
- Assignment to close in under 12 months, with a 62-day final escrow and no renegotiation
- Uncertain occupancy replaced with a new 7-year lease at market rent
- Clear plan to return the building to 95% warehouse, 5% office
- The seller exited and moved into a 1031 exchange. The buyer acquired a leased building with a clear value-add plan.
Takeaways
Lessons for owners
Lesson 1
Keep a clean, current lease.
An expired lease, a handshake agreement or an unclear month-to-month status can cost you your best buyer. Buyers and lenders want certainty. A signed, current lease gives it to them.
Lesson 2
Know your market rent.
If you own a leased building, you never know when you may need to sell. Investors value a building on its income. A below-market lease lowers that value, sometimes by a lot. Check in with a local broker or advisor before you renew or extend so your rent stays in line with the market.
Lesson 3
Solve issues before you sell, or price them in.
Deferred maintenance and unpermitted improvements do not disappear in escrow. Either address them ahead of a sale or account for them up front so they do not derail the deal.
Own an industrial building in the Inland Empire West?
A tenant question, unpermitted space or deferred maintenance does not have to stall your sale. These are the deals we know how to close. Request a confidential valuation or a lease review.
(909) 373-2713
Kyle Vizzo | Broker Associate | Lee & Associates – Ontario | DRE #02061917