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11/12/19
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An unidentified 1031 exchange investor paid $9.17 mil for a 34.3k sf ($267/sf), freestanding flex industrial property in Carlsbad. Located at 2251 Rutherford Rd, the building has recently been renovated and transformed into a creative flex industrial space.
The property features a new glass line, fitness center, outdoor meeting areas, drought tolerant landscaping and multiple grade level doors. The building was 100% leased at the time of sale to Denso, a leading supplier in the automotive industry and Aesthetic Revolution, a high-end training apparel company.
The building is adjacent to the McLellan-Palomar Airport, the fourth-busiest single runway airport in the United States. The property sits three miles west of I-5, a major SoCal freeway that connects Carlsbad to the rest of San Diego, as well as Orange County. Carlsbad is home to a wide range of business clusters including life sciences, action sports, clean technology, information and communications technology (ICT), and hospitality and leisure.
“Carlsbad has been the hottest flex industrial submarket in San Diego County over the past two years, posting over 1 msf of positive absorption since the beginning of 2017,” said Pourcho. “Industrial buildings of this size are in extremely high demand, particularly in Carlsbad, where the vacancy rate is currently 1.7% for this product type and its size range. The desirability of this type of asset, coupled with the recent renovations to the property, allowed us to secure a high sales price that ended up being above our original asking price.”
CBRE’s Matt Pourcho, Anthony DeLorenzo, Gary Stache, Roger Carlson and Greg Lewis represented the buyer and the seller in the transaction. The repositioning of the property was led by Jeremy Dentt and Ryan Dentt of Pacific Realty Advisors.
Overall asking rates for industrial/R&D product are up by 25% over the past five years, with high-finish product responsible for the largest increase at 30%, according to a CBRE research report. North County San Diego continues to outpace the rest of San Diego, made evident by approximately 2 msf of net absorption over the past two years and nine of the last 10 quarters delivering positive net absorption.
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