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9/06/17
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San Francisco-based Swift Real Estate Partners financed its recent purchase of Five Thirty B, a 24-story, 232k sf Class A office tower in downtown San Diego, with $43 mil in acquisition money. Swift bought the asset, also known as the Union Bank Building, for around $58 mil ($249/sf) a couple of weeks ago, as reported on RENTV at the time.
Mike Walker, Brad Zampa, Megan Woodring, Taylor Shepard, Mark McGovern and Scott Peterson with CBRE secured and structured the floating-rate loan at a very low spread priced over 30-day LIBOR. The seven-year, interest-only loan was provided by a domestic life insurance company and provides funds to execute capital improvements as well as pay leasing commissions and tenant improvements. The loan also maintains flexibility to sell the property without incurring prepayment penalties in the later years of the loan term.
“Lenders competed aggressively for this opportunity. The reputation and track record of the sponsor, quality in-place tenancy and strong fundamentals in San Diego’s downtown sub-market created a frenzy of lender interest,” noted Walker.
The building, located between 5th and 6th Streets in downtown San Diego, was sold by Bosa Development, who purchased the asset for $53.2 mil from Kearny Real Estate Co in early 2016. Kearny had acquired the building in January of 2014 from Union Bank of California for $29 mil.
After acquiring the asset, Kearny rebranded the building as Five Thirty B and undertook a $15 mil renovation that included all new restrooms, a redesigned lobby with artwork designed by Matt Devine and completely refurbished conference center with new state of the art audio/visual equipment.
Louay Alsadek and Hunter Rowe of CBRE Capital Markets Office West were the investment advisors in this latest transaction. Matt Carlson, Ryan Grant and Jeff Oesterblad, also with CBRE, provided market leasing expertise.
“With downtown San Diego experiencing its highest historical net absorption this past year and a significant decrease in vacancy combined with the continued growth of the downtown population, the Five Thirty B offering attracted significant interest from investors and lenders alike,” said Alsadek.
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