Steel Peak Achieves Significant Profit in Quick Turnaround of San Diego IOS Property

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 marks a significant profit for Steel Peak, which originally acquired the property in February 2024 for $6.3 million.

The firm undertook a comprehensive redevelopment of the property, which included demolishing dilapidated structures, preserving useful buildings, and implementing upgrades such as new paving and fencing. These improvements enhanced the property's functionality, making it more attractive to potential tenants and buyers. The redevelopment also facilitated full drive-through access and expanded yard space, further increasing the property's utility and value.

Blake Rodgers, Co-Founder of Steel Peak, highlighted the sale 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, a trend driven by the scarcity of entitled IOS properties and intense competition for prime locations.

The property at 1324–1336 Magnolia Avenue offers warehouse, office, and yard space, with M-54 zoning and entitlement for outside storage. Its features include multiple access points and a level fenced yard, making it an ideal location for industrial and storage uses. The sale was facilitated by Cameron Czubernat and Kerry Schimpf of Commercial Property Group, representing Steel Peak, and Aidan James of Inland Pacific, representing the buyer.

This transaction not only demonstrates Steel Peak's ability to identify and capitalize on undervalued properties but also reflects the broader market dynamics favoring IOS properties in strategic locations. With plans to continue seeking IOS investment opportunities in the Western U.S., Steel Peak remains at the forefront of a niche but growing segment of the commercial real estate market.