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12/20/19
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IDS Real Estate Group purchased a 148.5k sf office building in San Diego’s Kearny Mesa area for $23.75 mil ($160/sf). The asset was sold by Massachusetts-based real estate investment trust Office Properties Income Trust.
Located at 4181 Ruffin Rd, the building was originally built in 1981 and renovated in 2013. The property was 83% leased at the time of sale to four tenants, including U.S. General Services Administration (GSA), a travel insurer and a technology company. The property has had a long history dating back to the 1990s with GSA tenancy, and GSA was nearly half the occupancy at the time of sale.
Immediately off Ruffin Road with over 450 feet of street frontage, the 10-acre site is well-positioned within the highly sought-after submarket of Kearny Mesa. The building is located within a half mile of the Montgomery-Gibbs Executive Airport, one of the busiest airports for small aircrafts in the U.S. and is within three miles of four major San Diego freeways that connect Kearny Mesa to the rest of San Diego County.
CBRE’s Louay Alsadek, Hunter Rowe and Brad Black represented the seller in the transaction. According to Alsadek, Kearny Mesa has a diverse tenant base including government agencies, technology, defense, education and healthcare.
Alsadek noted, “Kearny Mesa has historically been San Diego’s most steadfast office market and it will continue to evolve with the potential passing of the updated Kearny Mesa Community Plan. The initiative is being promoted by the City of San Diego with the goal of improving public infrastructure, access and creating vibrant, distinct, and walkable mixed-use sites throughout the community.”
Leasing activity and net absorption figures signaled a strong and stable office market in San Diego in the third quarter of 2019, according to a recent CBRE research report. The average monthly asking lease rate increased for the eighth consecutive quarter to $3.09 per square-foot, the highest asking rate this cycle.
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