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June 22, 2024
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Prime US REIT Acquires 296k sf Sorrento Mesa Office Property in $146 Mil Deal


Prime US REIT (PRIME) closed on a major, institutional office property buy, acquiring Sorrento Towers, a 296.3k sf Class A office complex in the heart of Sorrento Mesa, for $146 mil ($493/sf). Prime US REIT was advised in the deal by KBS, which serves as the U.S.-based asset manager for Prime’s portfolio. The property was acquired from real estate investment company Shorenstein Properties.

Built in 1990, Sorrento Towers is a LEED Gold-certified, state-of-the-art life science/office asset located at 5355 and 5375 Mira Sorrento Place, just south and east of the I-5/I-805 interchange and accessible to I-15 and other major local roadways. Sorrento Towers consists of two seven-story office buildings situated atop a multi-level parking structure. The property is centrally located in the San Diego region with easy access to surrounding business centers, public transportation, and residential communities.

Shorenstein acquired the property in 2018 and increased occupancy to 98%. Over the last few years, the property underwent significant upgrades including state-of-the-art tenant improvements, updates to the common areas, a fully renovated open-air plaza, an upgraded fitness center, conference spaces, training center and collaborative meeting areas.

Sorrento Towers is one of three assets KBS has assisted PRIME in acquiring for its portfolio since listing on the Singapore Exchange in 2019. “At 98.2% occupancy, Sorrento Towers is one of the most sought-after properties in San Diego’s premier innovation hub and is within walking distance of over 60k sf of high-quality retail amenities,” says Gio Cordoves, Western regional president for KBS.

The Sorrento Mesa submarket where Sorrento Towers is located is home to San Diego’s largest concentration of technology companies, including those in the life science, biotech and med-tech sectors, telecommunications, wireless applications and healthcare. Its location just east of Torrey Pines, University Town Center and University of California San Diego, and just south of Del Mar Heights is drawing in such global firms as Google, Apple and Qualcomm, which continue to expand their presence in San Diego. The region’s mild climate, desirable lifestyle, highly qualified and educated talent pool, respected universities and research institutions, and lower office rents relative to other coastal California markets is driving the market’s growth in digital technology-focused firms.

“Among the top 15 tech-centric markets, San Diego boasts the highest concentration of its population categorized as Millennials at 31.6%, securing a substantial workforce for the future. It also boasts the highest percentage of patent growth, recording an 84.4% increase in the last five years, making it highly innovative and a breeding ground for spin-off tech companies.” says Cordoves. “These factors position the office market for strong performance in the foreseeable future.”

Kevin Shannon, co-head of U.S. capital markets, Brunson Howard, executive managing director and Ken White, executive managing director at Newmark brokered the sales transaction. Attorneys Bruce Fischer, Tatyana Litovsky, Christine Fan and Howard Chu, and paralegal Amanda Kennedy, of global law firm Greenberg Traurig, LLP’s Orange County office represented PRIME as legal counsel in the acquisition.

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