Tom Martinez, Evan Knudson and Brian Klepacki (tenant brokers); Rich Kwasny, Shane Harmon (landlord brokers)
Siempre Viva Business Park, 9043 Siempre Viva Road, San Diego
257,972 square feet
Total consideration: $4.5 million
About the property:
After a lengthy discovery process, Los Angeles-based toy manufacturer Imperial Toy Company selected Siempre Viva Business Park to expand its West Coast distribution/manufacturing presence. Located in the Otay Mesa submarket, the 258,000-square-foot building was chosen over facilities in other West Coast markets, including Los Angeles, Inland Empire, Orange County, Temecula and Tijuana. The five-year lease was signed seven months prior to the expiration of its current 155,000-square-foot lease (also in Otay Mesa) and was structured in a way that allowed free occupancy for the entire remaining lease and six months afterward, thus allowing Imperial Toy to phase its move-in and not disrupt ongoing business.
Closing the deal:
Imperial Toy Company’s original 155,000-square-foot lease was signed at the height of the market, was almost 50 percent above market rents, and had two years left when engaged by CBRE. Imperial Toy Company needed to expand its manufacturing/distribution footprint immediately, but did not want to increase real estate costs. CBRE negotiated short-term space (around 80,000 square feet) in Tijuana while the deal with Siempre Viva was being negotiated. The deal was completed seven months prior to the original lease expiration with 13 months of free rent and another two years of reduced rent, which allowed a phased and cost-effective move in period. The deal was a 66 percent increase in size and a 32 percent reduction in total monthly rent.
Imperial Toy Company was searching across the West Coast to find the best location for one of its largest facilities. The successful lease negotiations helped Otay Mesa retain a large tenant and San Diego retained a valuable manufacturer.
Manufacturing is one of the largest industry sectors in San Diego. Retaining Imperial Toy Company and increasing the company’s San Diego footprint was a significant accomplishment. CBRE’s creative strategy to find temporary space across the border, while negotiating a lease for larger space and improved terms on behalf of Imperial Toy Company, ensured that the manufacturer would remain in the region.