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8/06/15
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In San Diego’s Kearny Mesa submarket, a 294.4k sf retail portfolio was purchased by a commingled fund managed by Clarion Partners, working with existing partner HP Investors LLC, for $107.15 mil, or around $364/sf. The assets were sold by the McGrath Family.
The portfolio is situated on 29.07 acres along Clairemont Mesa Blvd and Shawline Dr, just off of I-805. It is comprised of six single-tenant leased retail properties and one retail strip center.
The properties are tenanted with some of the most sought after national retailers in the market, including Wal-Mart, LA Fitness, McDonald’s, Food 4 Less, Starbucks, Verizon, and Chipotle, among others. It was 100% leased at the time of sale.
“The timing was right for this sale and it worked for us in terms of our long-term goals,” said Laurie McGrath, President of McGrath Development, Inc. “While real estate development has been challenging, fun and certainly rewarding, we have other things that we would like to accomplish. Our larger goal will be growing our Foundation as well as pursuing redevelopment of some of our other properties.”
The McGrath family has owned the land on which the McGrath Retail Portfolio is situated since the late 1940s. In 1990, McGrath broke ground on the development of the McGrath Center, a 50-acre, mixed-use project originally approved to include 1.5 msf of office, retail and R & D uses. The plan was later revised to include mostly retail uses and a 100k sf industrial “flex” building.
“My senior management team has been with me from day one,” McGrath explains. “After launching McGrath Development Inc. in 1988, we worked together to visualize the project and bring it to fruition. My father, C.W. McGrath, who is best known for founding one of the largest general engineering contracting firms in the county, completed the grading and infrastructure work for the development, while my team handled the design, construction and marketing of the project.
The Clarion / HP team represented themselves in the transaction. Randy LaChance, Senior Vice President, SIOR, and Mark Caston, Senior Vice President, both of Voit Real Estate Services, represented the seller, McGrath. According to LaChance, the portfolio has maintained an occupancy rate of over 97% since 2001.
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