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8/29/17
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Two flex/office properties totaling 140.5k sf of space in San Diego’s Kearny Mesa submarket sold for $18.5 mil, or $132/sf. The buildings, which sit on 7.61 acres, include the Aero Office Building, a 37k sf, three-story, multi-tenant office property at 8875 Aero Dr, as well as the 103.5k sf AeroVault building at 8825 Aero Dr.
Brandon Keith, Randy LaChance and Jon Boland of Voit Real Estate Services represented the seller, 8825 & 8875 Aero Drive Holdings LLC. Kipp Gstettenbauer and Ryan King, also with Voit, repped the buyer, Protea Aero Drive LLC.
“The AeroVault is one of the most unique buildings in the market today,” says Keith. “The property was constructed for Bank of America in the early 1980’s as their primary Southern California money vault, which purported to hold up to $1 billion in cash and coin at peak operation. Based on this specialized use, the building has no first floor windows, and features heavy concrete security elements throughout the ground floor.”
The history of the two-building asset is complex, according to Keith, who explains that the AeroVault has been vacant for nearly eight years, and that both buildings underwent court ordered receivership, followed by foreclosure, and finally asset management by special servicer LNR Partners.
The sale was considered as a tremendous value-add opportunity. According to LaChance, the Kearny Mesa flex and office markets are among the strongest in the county, and this sale presented an exceptionally strong opportunity for a buyer to reposition the facilities for lease in a tight market.
This strategy is well-aligned with the buyer’s plans for the property, which include the renovation and re-positioning of the AeroVault into a premier creative tech / corporate office facility in Kearny Mesa,
“Protea’s vision is to create a state-of-the-art creative office environment like no other in this submarket,” Gstettenbauer says. “Leveraging the building’s excellent 4.75/1,000 parking ratio, 15-foot high concrete ceilings, and outside open spaces, the buyer will re-design the building inside and out in order to offer unmatched lifestyle amenities and maximize flexibility for a wide range of office, medical, and technology tenants.”
Protea has retained Ware Malcomb as the architect on the project. Kipp Gstettenbauer, Ryan King, and Brandon Keith of Voit’s San Diego office will handle marketing efforts and the repositioning campaign for both assets going forward.
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