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Two More Downtown San Diego Office Buildings Trade Hands

The DiamondView office tower has sold again, this time to DivcoWest Real Estate Services for nearly $202M. The seller, locally based Cruzan, had purchased it in 2012 for $121M.

National real estate investment firm DivcoWest Real Estate Services has acquired the 15-story DiamondView East Village office tower at 350 10th Ave. in downtown San Diego for nearly $202M, the San Diego Union-Tribune reports. The sale price works out to about $601/SF. The seller, local developer/investor Cruzan, purchased this 305,255 SF asset in 2012 from Cigna Investments for $121M.

This represents a record-high per-square-foot sale for a local office asset, but according to CoStar, the 623K SF One America Plaza office tower at 600 West Broadway holds the record for top price, selling for $300M in 2006, or $482/SF. The DiamondView East Village acquisition was funded by DivcoWest’s $1.5B Fund V, which includes more than 40 institutional investors.

DiamondView, so called for its bird’s-eye view of action inside Petco Park, was designed by Carrier Johnson + Culture and developed by Cisterra Development, with completion in 2007. This was the first office project to be built as part of a major league ballpark. The project’s amenities include a 35K SF gym, ground-floor retail and a skybox on the top floor with open-air seating to view events at Petco Park.

This office building at 1420 Kettner Blvd. in Little Italy will be repositioned by the buyers to co-working space.

DivcoWest appears to be in buying mode. The company also has partnered with Ocean West Capital Partners to acquire a seven-story, 123K SF office building at 1420 Kettner Blvd. in Little Italy, along with the 2.6-acre parcel where it sits, which had been under a ground lease. The value of these deals was not disclosed. The buyers are planning a multimillion-dollar overhaul of the building to reposition it as co-working space, according to Kennedy Wilson Executive Vice President Fred Cordova, who represented the sellers in the building and land deals.

Citing Little Italy’s retail amenities and popularity with millennials, Ocean West Director Ryan Tucker said in a press release that his company plans to transform the building into a unique, active work environment with amenities and outdoor space.

Downtown San Diego is the region's king of flexible office space, with 15 operators offering 261K SF of co-working, executive suites or incubator space, according to a report from JLL. Approximately 40% of downtown’s population is composed of young professionals who desire flexible workspace with communal amenities and will continue to fuel growth in this sector.

With the Trolley extension and thousands of residential units under construction or in the pipeline, downtown is attracting professionals of all ages.