The San Diego-based CruzanMonroe development and investment firm is teaming up with Cigna Insurance to acquire the 300,000-square-foot DiamondView Tower overlooking Petco Park for about $120 million.
The15-story office and retail asset, which is only 4.7 percent vacant according to The CoStar Group, is being purchased from Wereldhave USA, a Dutch firm that had paid $161 million or about $536-per-square-foot for the property in September 2008. Cisterra Partners LLC of San Diego developed the property that was constructed about the same time as Petco Park in the mid-2000s.
While both CBRE (office) and Cushman & Wakefield (retail) have been involved in DiamondView’s leasing, the sales brokers are covered by confidentially agreements and are unable to comment on the sale. CBRE has offices at DiamondView.
Other DiamondView tenants include Comerica Bank, Cox Communications, Align General Insurance Agency, as well as retail tenants such as the Tilted Kilt and the Fit Athletic Club among others. Filling the retail had been a problem during the recession, but that activity appears to have improved.
Wereldhave, which is also expected to sell the 380,000-square-foot First Allied Plaza (Advanced Equities Plaza) building at 655 W. Broadway once the DiamondView transaction is completed, is reportedly selling DiamondView for an estimated $121.2 million, or about $404 per square foot.
CruzanMonroe officials have declined comment on the particulars saying that the transaction is still early in the due diligence period. It also wasn’t clear whether or not CruzanMonroe might be interested in acquiring the Advanced Allied Plaza building that Wereldhave bought for $210 million in mid-2007 that also is expected to be sold soon.
While principals Dennis Cruzan and Phil Monroe, who had worked together at what had been known as John Burnham & Co., have been acquiring commercial buildings and commercial land for development for many years, DiamondView would be the firm’s highest profile acquisition albeit in conjunction with Cigna (NYSE: CI) as its moneyed partner.
The CruzanMonroe team has purchased some sizable assets over the years that have included the 117,000-square-foot Plaza del Mar office campus in Del Mar Heights for $34 million last January; the 123,000-square-foot Scripps Wateridge development for $24.75 million in Sorrento Mesa in 2005; and the 204,000-square-foot Century Park I for $29.75 million in Kearny Mesa purchased in April 2003. That last property was later acquired as part of a portfolio sale by Menlo Equities in December 2004.
As a developer/builder and asset manager, Cruzan Monroe projects have included the 240,000-square-foot Paseo del Mar office development in Del Mar Heights, the redevelopment of the 46,000-square-foot TR Produce warehouse building in Downtown San Diego that includes both office and retail; and the 115,000-square-foot Sorrento Pines in Sorrento Valley. CruzanMonroe purchased that property for $10.75 million in 2003 before upgrading and then selling the asset for $18.9 million in 2005.
The company has also acquired or has entitlements for hundreds of thousands of square feet in Carlsbad and Oceanside in such areas as Ocean Ranch in Oceanside and the business parks on and around Loker Avenue in Carlsbad.
Regardless of who buys the Allied Plaza building, it is an asset that hasn’t fared as quite as well as DiamondView in terms of leasing. CoStar reported the Lankford & Associates-developed tower was running at about 20 percent vacant at the time of its survey within the past month.
As noted in a Bloomberg News report Thursday there appears to be little doubt that Wereldhave wants to quickly sell off all of its U.S. holdings, which of course includes Diamondview and First Allied Plaza.
Bloomberg News announced on Thursday that that the Dutch company was hoping to sell its millions of square feet of office holdings and thousands of U.S. apartments in a single transaction to a single entity, though the story didn’t mention Cigna by name. The insurance firm would then team with local partners such as CruzanMonroe on the individual properties.
Wereldhave has seen its stock plummet by 15 percent thus far this year. Matters came to a head on July 23 when the firm cut its dividend targets and CEO Hans Pars quit, Bloomberg reported. Pars has been replaced by Dirk Anbeek, who had been the company’s chief financial officer.
Bloomberg News contributed to this story.