Sam Zell's New Tech Hotspot?
Sorrento Mesa continues to cement its rep as a tech hub. Case in point: Parallel Capital Partners has partnered with Sam Zell's Equity Group Investments to acquire Wateridge Plaza for $72.5M.
CEO Matt Root tells us this is Parallel's first deal with Zell. The JV purchased the three-building, 279k SF campus from Beacon Capital Partners and C-III Realty, with plans to deliver creative high-tech space. The Wateridge project was fully marketed a year ago by Eastdil. A pending vacancy by 50k SF tenant Quintiles reduced occupancy from 90% down to the low 70s and gave many potential buyers pause, Matt says. "That's what provided the opportunity for us to jump in and acquire it for what we think is a great basis going in." (Optimists see the building as half full.)
The new owners now have 75k SF and four floors to fill. Matt calls it "great space" with floor-to-ceiling glass. (It's a better mirror than your iPhone.) Beacon and C-III made $14M in upgrades, and Parallel will expand on that, hiring Gensler and Glanz Signing & Graphics for a renovation including modified exterior colors, new signage, and warming up the courtyard. Matt's anxious to enhance the project's curb appeal, noting Sorrento Mesa's not only a tech and life science corridor, but also an emerging office hub. Cushman & Wakefield's Eric Northbrook and Chris High are handling leasing.
The eight-acre site includes future development potential for an additional 168k SF. Matt says planning will start immediately; he estimates it'll probably be 24 months before they break ground. With Sorrento Mesa's Class-A vacancy pegged at 6%, there's plenty of tenant demand, he says. Parallel's not done there—next week, Matt anticipates closing on the $101M acquisition of Shoreline Square in Long Beach from Guggenheim. This one's for its own account, without partners. But tomorrow, he'll be at the Honda Center in Anaheim, cheering for SDSU against Arizona. He's got the Aztecs getting into the Elite Eight.