Brandon Keith, Tracy Clark
Voit Real Estate Services
900 Hitachi Way, Chula Vista
87,000 square feet
Total consideration: $11.85 million
About the property:
Brandon Keith and Tracy Clark of Volt Real Estate Services' San Diego office successfully completed the $11.85 million acquisition of an 87,000-square-foot office building in Chula Vista. Keith and Clark represented the buyer, CHG Foundation (Community Health Group), a California nonprofit health plan operating in San Diego County. The completion of this transaction marked the largest office sale in the Chula Vista submarket in 2012.
The client was seeking a larger headquarters facility in close proximity to its current headquarters in Chula Vista to expand its operations. CHG Foundation will occupy 67,000 square feet of this twostory office/flex building. The remaining 20,000 square feet will be occupied by Hitachi America Ltd., a global supplier of household electronics, on a lease which was completed as part of the sale. The seller, Chula Vista Investment Group, is a real estate fund managed on behalf of the Alaska Permanent Pension Fund, and was represented by Mickey Morera and Chris Holder of Cushman & Wakefield.
Closing the deal:
There were virtually no good recent sales or other comparable transactions in the market to help establish a fair price for this building, and there was no stated asking price. As such, Keith and Clark had to establish what they felt was a reasonable sales price (considering this lack of information) and get their client along with the board of directors to accept the determined figure.
The seller was looking at a near $5 million loss from what they paid, based on an estimation of current value. Through negotiations, Keith and Clark managed to get the seller to accept the substantial loss and enter into an agreement. This agreement had a major contingency, which was their negotiation of a new lease and substantial downsizing of the existing tenant (Hitachi) within a 30-day timeframe.
While this proved quite challenging, the brokers ultimately were successful in getting the parties to agree to the terms and sign a lease. The buyer waived contingencies and closed 10 days later.
The completion of this transaction marked the largest office sale in the Chula Vista submarket in 2012.