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2/08/23
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A joint venture between Elevation Land Company and a real estate fund advised by Crow Holdings Capital will be constructing a brand new, 1.8 msf industrial / warehouse / distribution development in San Diego’s Otay Mesa area. The project is strategically located in San Diego’s South County, adjacent to the U.S.-Mexico international border.
Named Otay Business Park, the new project is considered one of the largest new Class A distribution developments in all of Southern California, a prominent industrial region including the San Diego, Greater Los Angeles, Inland Empire and Orange County markets.
Current construction plans for Otay Business Park call for the speculative and/or build-to-suit development of eight individual freestanding buildings that can accommodate a variety of users ranging from 45k sf to 500k sf+. Key features of the project will include expansive 32’-36’ clear height, 325+ dock high loading positions, 175+ trailer stalls & 16 grade level loading doors.
Elevation Land Co, in partnership with Crow Holdings, had acquired a total of 263 acres of land where the project is being developed during the second quarter of 2022 for $165 mil. The land purchase included the 119 acres on which Otay Business Park is being built, along with several right of way parcels that are necessary to construct public dedicated roadways through the site, also including 68 acres of on-mesa biological mitigation land and 76 acres of off-mesa non-native grasslands.
Cushman & Wakefield’s Brant Aberg, Ryan Downing and Trent Smith have been retained by Elevation Land Co for project Leasing services for the new Otay Business Park. The firm’s Bryce Aberg, Jeff Chiate, Jeff Cole, Zachary Harman, and Brant Aberg represented the seller, Otay Venture LP, in the 2022 sale transaction.
“Otay Business Park will be a state-of-the-art project that is both highly flexible and functional. Positioned in an emerging area that has attracted major industrial and e-commerce companies, the project will offer users a highly convenient modern location that is proximate to many vital logistical destinations, both domestically and internationally, including the Ports of Los Angeles and Long Beach, multiple airports, as well access to the thriving Phoenix market within six hours and Mexico,” said Aberg.
Phase I of Otay Business Park will consist of 1.03 msf in five buildings that is scheduled for completion in the second half of 2024. Phase II, which will consist of the remaining 770k sf in three buildings, will be anticipated for completion approximately 12 months after Phase I completion, tentatively late 2025. All buildings are planned for speculative development but may also be delivered on a build-to-suit basis for occupants.
Otay Business Park’s location offers quick access to California State Route 11 and the newly completed California State Route 905 Fwy. Its proximity to the international border also provides immediate access to Tijuana International Airport, the planned $800 mil Otay Mesa East Port of Entry border crossing, and the new $120 mil Cross Border Xpress airport terminal, a processing facility with a cross-border bridge that improves domestic and international access. The project also lies within the Foreign Trade Zones and HUB Zone, significantly benefiting local trade operations.
According to Cushman & Wakefield, the 22 msf Otay Mesa industrial submarket is a market leader in San Diego, recording nearly 1.6 msf of positive annual net absorption in 2022 and 7.3 msf since the start of 2018. Vacancy in the submarket was only 3.8% as of Q4 2022.
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