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SAN DIEGO NEWS
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SR Commercial Picks Up 300k sf of Assets in San Diego County

8/15/14

SR Commercial recently acquired two San Diego County commercial real estate assets encompassing nearly 300k sf of space and totaling over $51 mil of total capitalization. The purchases include a 235.5k sf portfolio of office, industrial and retail product in Miramar, and a 62.8k sf industrial/Flex project in San Diego.

“Competition continues to climb for high-quality investment product in San Diego County,” explains Adam Robinson, a Principal at SR Commercial who founded the company along with partner CJ Stos. “Limited opportunities combined with strong tenant demand are beginning to drive rental rates upward in both office and industrial markets. The result is that investment properties on the market today are poised to deliver deep value to those investors who are able to secure product.”

SR Commercial has acquired over 1 msf of investment product in the past 24 months, and plans to continue to invest in large properties and portfolios throughout San Diego, Orange County, Los Angeles, and the Inland Empire.

In the larger of the two recent deals, SR Commercial acquired the Mark II Portfolio, a 235.5k sf, high-quality portfolio of office, industrial and retail product in Miramar, for $40 mil fully capitalized. The portfolio, which encompasses nearly 15 acres of land, is located near the intersection of I-15 and Miramar Rd. It consists of eight single- and multi-tenant industrial buildings, five multi-tenant office buildings, and one retail/showroom building that is currently fully occupied by 24 Hour Fitness.

“This portfolio represented a rare opportunity to acquire a critical mass of real estate in San Diego County, within a submarket that is increasingly demonstrating its strength in tenant demand,” explains CJ Stos, a Principal and Co-Founder of SR Commercial.

SR Commercial’s primary strategy for this investment property, which was 94.4 percent occupied at the time of purchase, is to increase rents across the portfolio to meet today’s market rate.

“Current tenant lease expirations will occur on a staggered schedule, providing the flexibility to lease space over the next three years,” explains Stos. “This gives us the ability to capitalize on increasing tenant demand in the Miramar submarket, and to increase value through strategic rent increases.”

On the five office assets, SR Commercial plans to make minor external improvements, including new exterior paint, roofing, HVAC repairs and landscape upgrades.

“We plan to hold the office assets on a short-term basis and sell the five buildings separately or together within a one to five year period,” notes Stos.

Alternatively, SR Commercial plans to hold the eight industrial assets on a long-term basis as a cash flow investment. The company will replace old roofs and HVAC units, update the landscaping and facades, and repair the parking lots upon tenant rollover as needed.

SR Commercial and the seller, TA Realty Associates, were both represented by Brad Tecca, Rick Reeder, Bryce Aberg, and Brant Aberg of Cassidy Turley in the acquisition.

In the other purchase, SR Commercial acquired the Morena Business Center, a 62.8k sf industrial property located at 2620, 2640 and 2645 Financial Court in San Diego, for $11 mil fully capitalized. The property was 74 percent occupied when acquired.

SR Commercial plans to renovate the vacant units, creating a more modern build-out with polished concrete floors and exposed ceilings. Additional improvements to the project will include new exterior paint, awnings, and signage, as well as updated landscaping.

SR Commercial and the seller, a family trust, were both represented by Bryce Aberg, Brant Aberg, and Brad Tecca of Cassidy Turley in the transaction.







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