San Francisco investor acquires an Otay Mesa industrial portfolio

April 21, 2015

A unit of San Francisco-based Stockbridge Capital Group has purchased about 700,000 square feet of Otay Mesa industrial properties for $45.2 million.

Stockbridge may be best known for owning the Hollywood Park site in Inglewood, to where St. Louis Rams owner Stan Kroenke is trying to bring an NFL team.

A Stockbridge entity known as Stockbridge San Diego Industrial LLC acquired 13 buildings and a vacant parcel within five Otay Mesa business parks.

As noted by Eric Parker, a CBRE (NYSE: CBG) senior vice president, the buildings are within portions of the Border Point Business Park, Otay Distribution Center, Otay Crossings Business Park, Faraday Industrial Park and San Diego International Center.

Stockridge Capital could not be reached for comment for this article.

The seller of the Otay Mesa properties was a unit of TA Associates Realty of Newport Beach. A majority stake in that multi-billion firm was acquired by The Rockefeller Group for an undisclosed sum at the end of 2014.

The buildings occupy a total of about 53 acres, while the vacant parcel is about 45,000 square feet.

The buildings are located at 2695 Customhouse Court, 10025 Siempre Viva Road, 2325- 2375 Michael Faraday Drive, 2350 Marconi Place, 8780-8830 Siempre Viva Road, 6987-6995 Calle del Linea and at 6754-6794 Calle de Linea.

The buildings range from about 33,000 square feet to about 153,000 square feet. The portfolio is reportedly 91 percent leased.

8830_Siempre_Viva_Rd

R.L. Jones, a customhouse brokerage firm, occupies the entire 153,000 square feet at 8830 Siempre Viva Road. That lease is in effect until July 2017, according to The CoStar Group (Nasdaq: CSGP).

The 111,644-square-foot building at 2695 Customhouse Court is nearly completely occupied by U.S. Joiner, according to CoStar. U.S. Joiner is a major manufacturer of interiors for major oceangoing vessels.

Parker referred to the buildings as being “a mixed bag” with some he classified as having some “functional obsolescence.”

Darren Mullins, a DTZ broker who specializes in industrial properties, said Stockbridge picked an excellent time to purchase.

The vacancy in Otay Mesa was 21 percent (with more than 3 million square feet empty) in 2000, Mullins said.

“Today that vacancy is about 10 percent,” Mullins said, adding that about 1.5 million square feet of vacant industrial space remains on the mesa.

Stockbridge Capital has an ownership stake in numerous other industrial and office properties in San Diego.

Its assets include the Scripps Summit properties in Scripps Ranch, and two buildings totaling 225,000 square feet on Scripps Summit Drive and Scripps Summit Court.

In Vista, Stockbridge owns a 202,000-square-foot building on Viper Way occupied by Directed Electronics.

The investment firm also owns a roughly 45,000-square-foot building along Mesa Rim Road in the Sorrento Mesa area.

By CoStar’s accounts, prior to this latest acquisition, TA Associates Realty had ownership interests in 48 buildings in 31 properties from the border to Carlsbad.

Other buildings were TA has an ownership interest in San Diego County include the 106,189-square-foot 2020 Camino del Rio North Plaza at the same address in Mission Valley, the 133,079-square-foot Carlsbad Executive Plaza office complex in the 2100 block of Palmoar Airport Road, the 93,000-square-foot flex building on at 2765 West Loker Ave. in Carlsbad, and more than 123,000 square feet of industrial space on Mata Way in San Marcos.

TA Realty previously owned the 161,184-square-foot Genesee Executive Plaza in the 9300-block of Genesee Avenue in San Diego.

Stockbridge and its joint venture partner sold the propery in late 2014 for $72 million. In fall 2011, the two-building campus was sold to the joint venture for $46.8 million.

At of the end of last year, TA Realty had a $12 billion portfolio of ownership and management assets comprising 77.2 million square feet, plus another 14,600 residential units located in 35 markets nationwide.

By THOR KAMBAN BIBERMAN, The San Diego Daily Transcript

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