Fresh off of an $80 million capital raise, Fresno-based tech development firm Bitwise Industries is putting all of its remaining California properties up for sale in pursuit of a leaseback from a future owner.
The company announced an expansion of its tech development hub model into its tenth city – located in the south side of Chicago – after netting $80 million from the Kapor Center, The Motley Fool, Goldman Sachs and Citibank.
Driving the news: The three buildings on the block are the company’s Fresno headquarters – Bitwise State Center – the two-story former Turk’s Kern Copy building and Bakersfield’s former Vincent’s Cyclery & Sporting Goods.
- The two Bakersfield properties have undergone more than $2.5 million and almost $3.7 million of upgrades, respectively.
- The former Porterfield Hotel building, which Bitwise bought last year, was not included in the marketing paperwork.
Analyzing the move: Sale-leaseback deals like this are a common way for tenants to raise money and convert non-liquid assets into working capital.
- By remodeling and modernizing the wayward buildings in recent years, Bitwise is betting on generated equity to increase cash returns.
- The three properties are being marketed to include rent increases of 2.5 percent annually.
- The portfolio of the three buildings did not have an asking price, per listings.
What they’re saying: “How much it’ll sell for, and what they’ll get out of the sale, will depend upon how the market views the strength of Bitwise,” Matt Starr of ASU Commercial told The Bakersfield Californian.
- Starr added that the triple net price per square foot of $2, while not unheard of in the area has not been reached in downtown Bakersfield.
