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Noteworthy Deals

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The Daily Transcript received many nominations for its commercial real estate awards from various brokers throughout San Diego. Some of these didn’t quite fit within our set categories, but were interesting and impressive deals nonetheless.

No. 1 -- The 15-year lease of the 106,584-square-foot industrial building at 9054 Carroll Way in Miramar for $16 million to tenant Ballast Point Brewing and Spirits presented a unique challenge according to Voit Real Estate Services, which represented both sides of the deal. Ballast Point was looking to expand from its initial production brewery, and needed a space with particular requirements ranging from ceiling height to power, water, floor drainage, outside storage and easy access for trucks. Voit found this property, which has been owned by HG Fenton since 1997, and met all necessary criteria, including a central location. The space will be Ballast Point’s main brewery as well as hold the bottling and canning lines, and is scheduled to open for production in the summer of 2014. Brokers for the transaction were Jeffrey Chasan, Randy LaChance and Todd Holley.

Chasan

LaChance

Holley



No. 2 -- The transaction components in the closing of 17 units at 600 Prospect St. in La Jolla were both creative and unusual. Dave Plutner, broker at DP Properties, represented the buyer, and Aaron Bove and Ben Tashakorian of Marcus & Millichap represented the seller in the deal that involved not only cash, but also properties as payment. Plutner said the complex transaction involved buying the property with $3 million in cash, the hopes of getting a $4.25 million commercial loan and throwing in two properties -- a duplex valued at $1.2 million and a condominium valued at $500,000 -- for a total consideration of $8.95 million in cash and trade properties. After tenuous moments with the seller wanting to back out, Luther Burbank Savings got all $4.25 million in loan dollars with two hours to spare in the allotted timeframe, and the deal closed Jan. 8. Plutner said the transaction ended up being three in one, with the buyer buying 17 units from the seller, while the seller had two simultaneous escrows of buying the buyer’s two properties.

Bove

Tashakorian

Plutner



No. 3 -- Joshua Smith of ECP Commercial closed a deal in December 2013 on a former convalescent facility at 458 26th St. in San Diego, which is adjacent and attached to a former hospital at 446 25th St.

Smith

Smith said he was able to sell the entire property in 2008 to an owner who wanted only the 75,000-square-foot former hospital building and hired him to immediately market the other building, which was no easy task because a lot line adjustment and physical separation of the buildings would be required. Smith secured Albert Einstein Academies, which was looking to expand, for the second building, though this sale was even further complicated by the need for a conditional use permit. The deal closed escrow with enough time for renovations to be completed for a target opening date in fall 2014.



No. 4 -- Arrowhead General Insurance was looking to consolidate from two buildings to one, as its 89,250-square-foot downtown location at 701 B St. was dated and needed remodeling. Through the work of brokers Tom van Betten of Cassidy Turley/San Diego, on behalf of AGI, and Matt Carlson of Cushman & Wakefield for the landlord Equity Office, the company was able to acquire enough benefits to stay in the space. With van Betten’s negotiation for free rent, a tenant improvement allowance and a reduction in the coupon rate, AGI decided to remain in the building under a new 10-year lease, which included offering a lower floor as “swing space” for employees during the remodeling of the building. This means 350 workers will continue to stimulate the downtown economy and an office market that has been struggling for years.

Carlson

Van Betten



No. 5 -- Douglas Wilson Companies completed the sale of a non-performing note with a $21.6 million balance to MFC Imperial I, LLC. The seller was an undisclosed major international financial institution. The note was secured by the 170-acre Luckey Ranch in Brawley, which includes a mixture of 273 residential single-family lots, 332 duplex lots, single-family and duplex model homes, and approximately 31.5 acres reserved for multifamily development. DWC said the sale had many complicating factors, including the assumption by the buyer of a multimillion dollar unpaid and defaulted property tax obligation, lot deterioration, vandalism of the model homes, and multiyear absorption period expected after market conditions recover, and a drainage retention basin on a nearby property owned by the buyer that affects the second planned phase of development of the Ranch. The sale was handled by Alan Scott and Tom Olson, who lead DWC’s brokerage division.

Olson

Scott



No. 6 -- When L’Garde Inc. was searching for a test facility for NASA’s Solar Sail Space Craft, the company said it spent six months with one real estate firm with no luck finding the 11,000-square-foot, industrial, rectangular, clear-span building without a support beam, at a football field in length and a minimum of 20-feet in width that they were looking for. Two weeks after switching to synergy Real Estate Group, Corporate Advisory, L’Garde said they found their new test facility in Tustin.


No. 7 -- DWC completed the receivership sale of Rainbow Lodge in Soda Springs, Calif., a historic 33-room bed and breakfast on 115 acres of Sierra Nevada land, including half a mile of South Fork Yuba frontage and a natural mountain spring with permitted water rights. Though the property isn’t local, San Diego brokers Alan Scott and Tom Olson handled the sale to Mitchell Partners Inc. for an undisclosed sum. Acting as an agent for the Receiver, DWC assumed day-to-day management of the property in August 2011 when Douglas Wilson was named the court-appointed Receiver, and a multitude of responsibilities ensued.


No. 8 -- The 90,000-square-foot industrial Class C Warehouse building at 1603 Main St. in San Diego was sold for $16.61 million, cash, to the Metropolitan Transit System in September. The seller, Helf Investments, was represented by Lee & Associates in this owner/user sale. The property, which was vacant at the time of the sale, contains 1,000 square feet of office space.



No. 9 -- The Cabrillo Technology Center -- a 17-acre campus encompassing three buildings and 285,585 square feet at 8650, 8680 and 8690 Balboa Avenue -- was purchased from Cabrillo Properties LLC by an affiliate of IDS Real Estate Group in joint venture with an institutional partner.

The campus is 96 percent leased to Raytheon and HDR Engineering. The 8650 Balboa Avenue building was built in 1963 as industrial, but renovated as office space in 2000, when the 8680 and 8690 Balboa Avenue office buildings were developed. The campus has LEED Silver certification and an Energy Star rating.

The $59.5 million sale was arranged on behalf of the buyer and seller by CBRE San Diego’s Louay Alsadek, Evan August, Brad Black and Andy Taylor.

Alsadek said the biggest consideration in closing the deal was the property’s major tenant, defense giant Raytheon Co., with more than 80 percent occupancy.

“During that period of time, with what’s going on in Washington D.C. with the defense budget discussion, it impacted some of the buyers’ underwriting,” Alsadek explained. “It’s reflected in the pricing.”

Alsadek said his firm was able to research some of the major contracts Raytheon is working on in the Kearny Mesa location, and the terms remaining on those projects. This served to allay some potential buyers’ concerns. “We heard many times that they were ‘cautiously optimistic,’” he said.

The significant size of the campus was attractive to potential buyers, as was the property’s ample parking and proximity to freeways. Many considered this site for its redevelopment potential, Alsadek said.

Alsadek

August

Black

Taylor

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