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4/04/19
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A private investor paid $3.8 mil for a 5.8k sf ($655/sf) property leased to Half Door Brewing Co in San Diego’s East Village neighborhood.
Located at 903 Island Ave, the property sits in an opportunity zone one block from Petco Park. Half Door Brewing Co, a brewery and restaurant, opened in 2015 and has been a prominent fixture in the growing neighborhood of East Village in Downtown San Diego due to its unique aesthetics and proximity to the San Diego Padres’ home ballpark.
The property was originally a residential duplex before being repurposed. It’s located one-half mile from the I-5 Fwy and two blocks from the Gaslamp District of Downtown San Diego.
The surrounding area is home to many of San Diego’s top tourist attractions, including the USS Midway Museum, Balboa Park and San Diego Zoo. Other prominent destinations including the San Diego International Airport and the San Diego Convention Center are located within two miles of the site.
James Lehigh and Nathan Holthouser of CBRE represented the seller in the deal. Ryan King & Kipp Gstettenbauer of Voit repped the buyer. The property sold at a 3.81% cap rate.
Retail cap rates have continued to rise both locally and in most U.S. metros, according to a CBRE research report. Market fundamentals in the local sector remain strong. San Diego had the lowest stabilized cap rate for Class B neighborhood/community centers and the fourth lowest Class A power rate across all U.S. metros in the report. Private investors, presumably attracted to the fairly steady cash flow and occupancy offered by retail product, were the most interested buyers in 2018.
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