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10/06/14
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A 103k sf industrial building in San Diego’s Otay Mesa submarket was purchased for $5.03 mil ($49/sf) by TriGate Capital LLC of Dallas, TX and Irvine-based Lotus Real Estate Partners LLC. The property, located at 9485 Customhouse Plaza, was purchased from Horoy Inc.
The transaction included a seven-year lease valued at $2.5 mil with Horoy, allowing the company to lease back 57.7k sf, or 55 percent of the building. The building is 100 percent occupied, with the other tenants being On-Time Logistics, with 30.9k sf, and Phase II Products, with 14.4k sf. The one-story property features 42 loading docks, eight drive-in doors and 24’ clear height.
The Customhouse Plaza building is located in a premier, nine-building industrial park in Otay Mesa, the second largest industrial submarket in San Diego County with approximately 15.3 msf. The property is located 15 minutes south of San Diego’s central business district along the U.S./Mexico border and is immediately adjacent to the U.S. port of entry for all trucks entering the United States from Mexico.
The location provides access to the greater San Diego area via the Interstate 805 freeway and State Route 905 which connects the main border crossing used by commercial truckers to the rest of the highway system. The building also offers direct access to Mexico via Otay Mesa Road, the main commercial thoroughfare between San Diego and Mexico. San Diego’s Brown Field and the Tijuana International Airport are also nearby.
The Lotus/TriGate Otay Mesa purchase is the second acquisition by the joint venture, which closed its first transaction last spring in Long Beach. The joint venture plans to invest approximately $60 mil in office and industrial value-add opportunities throughout Southern California over the next few years, with Lotus serving as the operating partner for the joint venture.
“The Otay Mesa building represents a continuation of our investment strategy to acquire well-located industrial and office properties in Southern California where we have the ability to add value through repositioning, development or proactive management,” said Brian Walker, managing partner for Lotus Real Estate Partners. “The property provides an outstanding opportunity to invest in one of the most dynamic industrial markets in all of California, which links the cross-border region between Mexico and the United States. With a rapidly declining vacancy rate, San Diego is poised for significant rental appreciation over the near-term. South San Diego County, and Otay Mesa in particular, are benefiting from the rising trend of corporation migration from the central part of the county to take advantage of lower rental rates and more functional product.”
Jay Henry and Jason Obenhaus were the TriGate executives leading the deal, with Jeffrey Chiate of the Irvine office of Cushman and Wakefield repping Lotus/TriGate in the acquisition. Stephen Dunn from the Romar Co in Rancho Santa Fe represented the seller.
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