Steel Peak Sells San Diego Area IOS Property for $9.5 Million, Highlighting Demand for Industrial Outdoor Storage
Steel Peak's sale of a San Diego area industrial outdoor storage property for $9.5 million underscores the high demand and value-add potential in the IOS market, particularly in Southern California.
Steel Peak, a commercial real estate investment firm, has sold a 12,000-square-foot industrial outdoor storage (IOS) property in El Cajon, California, for $9.5 million, a significant markup from its February 2024 acquisition price of $6.3 million. The buyer, C&M Manufacturing, Inc., plans to use the site for its oil and gas industry operations.
The property, located at 1324–1336 Magnolia Avenue, underwent extensive redevelopment, including demolition of dilapidated structures, paving, fencing, and building upgrades, enhancing its utility and functionality for IOS tenants. This sale reflects the strong demand for well-located IOS properties in Southern California, especially those serving contractors and construction-related businesses.
Blake Rodgers, Steel Peak Co-Founder, noted the quick execution of their value-add plan and the sale to a long-term owner-user as validation of their investment strategy. Pasha Johnson, Steel Peak Principal and Co-Founder, highlighted the aggressive pursuit by owner-users of high-utility sites amid scarce entitled IOS properties and increasing competition for prime locations.
The 2.5-acre property features M-54 zoning, entitlement for outside storage, and includes warehouse, office, and yard space, making it an attractive asset for industrial use. Steel Peak continues to seek IOS investment opportunities in the Western U.S., targeting properties with capitalized values between $3 million and $50 million.