Sorrento Mesa, already a hot submarket as an epicenter of tech in greater San Diego, continues to attract investors. Two separate deals were inked in the first week of February.
Waples Industrial Centre
Salt Lake City-based Bridge Investment Group has acquired the 97K SF Cornerstone Plaza office property in Sorrento Mesa for an unspecified price, and Newport Beach-based BKM Capital Partners bought a 99K SF industrial/flex portfolio totaling four buildings, two of which are in Sorrento Mesa, forming the Waples Industrial Centre (the other two buildings are in Carlsbad).
These investors are hardly alone in their interest in Sorrento Mesa. In December, TH Real Estate acquired The Yard in Sorrento Mesa, a repurposed creative office building, for about $24.8M.
In October, Crown Realty & Development acquired the 62K SF Oberlin in Sorrento Mesa for $20.4M.
In late 2017, a JV of Goldman Sachs Asset Management Private Real Estate and Montana Avenue Capital Partners acquired Centerpark Plaza, a 204K SF campus with eight flex industrial buildings and one office building in Sorrento Mesa.
Cushman & Wakefield's Tech Cities 2.0 report last year recognized the submarket for its tech and life sciences clusters. Sorrento Mesa landlords have capitalized on the trend, with buildings that are flexible for biotech or traditional office tenants.
“With no speculative development underway in Sorrento Mesa, we anticipate the submarket will continue to tighten, and Cornerstone Plaza will be a top choice for tenants who seek to take advantage of the area’s deep labor pool,” said David McCleve, director of acquisitions for Bridge Investment Group's Bridge Office Fund Manager.
Bridge plans to invest $5.2M for capital improvements in Cornerstone Plaza's two- and three-story buildings to make the layout and design more amenable to contemporary office tenants, as well as add move-in-ready spec suites of between 3K SF and 5K SF.
Originally built in 1986, Cornerstone Plaza is 68% occupied. Bridge will also undertake cosmetic renovations to its corridors, common areas, outdoor courtyards, lobby area and entrances.
"Sorrento Mesa, a premier tech market, has undergone rapid expansion over the last few years," Cushman & Wakefield's Mark Avilla said. "The market will continue to be positioned for long-term commercial growth."
Along with colleagues Justin Halenza and Michael Mahoney, Avilla represented the seller, 3G Properties, in the $16.5M trade of Waples Industrial Centre and the Carlsbad properties. Waples was developed in 1988 and consists of 35K SF in two low-rise industrial/flex buildings on 1 acre.