Sales Of Two Downtown San Diego Office Towers Demonstrate Strength Of Market
Neighboring office towers in downtown San Diego at 530 and 600 B St. have sold for a total of $167M, the San Diego Union-Tribune reports.
Bosa Development sold Five Thirty B to San Francisco-based Swift Real Estate Partners for $57.7M, according to CBRE broker Louay Alsadek, who represented the buyer. Bosa had purchased this 24-story, 232,936 SF office tower from Kearney Real Estate Co. in mid-2016, after Kearney invested $15M in capital improvements to modernize the building and add amenities. The building was 87.8% occupied at closing. Major tenants include Union Bank, the San Diego Regional Economic Development Corp. and the National Conflict Resolution Center.
Alsadek said Five Thirty B attracted buyer interest due to downtown’s significant decrease in vacancy and growing population.
The 600 B St. Building, which is home to the San Diego Union-Tribune, MiTek Systems and WeWork, sold to New York-based Rockwood Capital for $109.5M, according to Holliday Fenoglio Fowler, which represented the sellers, Lincoln Property and Angelo, Gordon & Co. This 24-story, 359,278 SF office tower sold in 2012 for $49M and in 1995 for $6M. The building was 89.7% leased at time of closing.
CoStar reported downtown’s overall vacancy rate, which dropped from 17.1% in 2012 to 11% today, is at 10-year low. Vacancy this low typically indicates more construction is needed, but no major office projects are under construction. Soon to break ground, Manchester Pacific Gateway, a $1.3B, 2.9M SF public-private, mixed-use development by Manchester Financial Group and the U.S. Navy, will provide 1M SF of Class-A office space, and Makers Quarter projects will add 971K SF of office space over the next five years.