Storage yard on Cactus in Otay Mesa sold

Thursday, September 25, 2014

The 7.5-acre storage yard with a 5,200-square-foot building in Otay Mesa at 6903 Cactus Court, San Diego 92154, has been sold for $2.86 million.

 Cactus

The buyer was Crown Xpress Transport, a California corporation with Lorena Guillen-Acosta as president and secretary, 9931 Via de la Amistad, San Diego 92154.

The acquisition was financed with first and second loans from Western Alliance Bank of $1,456,000 and $1,145,640, respectively.

James M. Wright was the seller of the property (assessor’s parcel 667-050-45). The two-story building was constructed in 1998.

The property was sold in December 2013 for $2.25 million with financing of $1,125,000 from US Bank.

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Mixed-use condos on Via De La Amistad in Otay Mesa sold

The 19,110-square-foot office and warehouse condominium in Otay Mesa in the Amistad Distribution Center at 10065 Via De La Amistad, San Diego 92154, sold for $1,180,800, cash.

Building

The buyer was Performance Wealth Investments, dba Amistad Otay LLC, 2505 Windward Way, Chula Vista 91914.

The seller of the property (assessor’s parcels 646-142-01 to 04 and 13 to 16) was City National Bank, who took back  the property as an REO.

Mark Lewkowitz of Colliers International represented the buyer, who plans to lease the property for investment purposes. Darren Mullins of Cassidy Turley represented the seller.

This two-story property features multiple dock positions and a 26-foot clear height in the warehouse.

“This was an all-cash transaction and the buyers were able to achieve one of the lowest price-per-square-foot in the Otay Mesa Market,” said Lewkowitz, associate vice president at Colliers.

“This property will prove to be a solid investment as it is located between the current border crossing and the future SR-11 commercial truck crossing in East Otay Mesa.”

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Otay Mesa Industrial Property Sold for $8.1 Million

Niceride1 LLC has purchased in Otay Mesa a 115,290 sq. ft. multi-tenant industrial property at 8851-8877 Kerns Street, located in the Siempre Viva Business Park.  They paid $8.1 million or $70.26 sq.ft.8851-8877_Kerns_StThe property was built on 7.58 acres in 2003 and was fully occupied at the time of the sale, with tenants including Otay Mesa Sales Inc. and Flanders.

 

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R&R International Freight Forwarding leased 35,640 square feet of industrial space

Recent industrial lease in Otay Mesa area.  Averages out to $.52 sq.ft. over the 65 months.

San Diego Daily Transcript – Wednesday, June 25, 2014

Industrial: R&R International Freight Forwarding Inc. has leased 35,640 square feet of industrial space in Otay Mesa in an industrial building at 2450 Siempre Viva Court, San Diego 92154, from JB Real Estate Holdings LLC. The space, in the master-planned Britannia Industrial Park, was leased for 65 months at $1.2 million, will be used for an international transport company.

building-OM

The lessee was represented by Jeff Saywitz, of The Saywitz Company.  The lessor was represented by Darren Mullins, of Cassidy Turley.

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Otay Mesa industrial vacancy rate improving

Wednesday, April 30, 2014

While Otay Mesa still has about 2 million square feet of industrial vacancy, the market looks healthier now than during the recession’s peak, when there were 3 million empty square feet .

According to a first quarter report compiled by Erik Parker, a CBRE (NYSE: CBG) vice president, Otay Mesa has shaved 5 percentage points off its direct vacancy rate during the past 24 months to 13.2 percent at March 31, as the economy has improved.

A 0.3 percent total in sublease space brings Otay Mesa’s overall industrial vacancy to 13.5 percent, so the submarket still has a ways to go before most of the space is filled.

Not every report agrees with CBRE’s assessment. A first-quarter CoStar Group (Nasdaq: CSGP) report concluded that Otay Mesa had an overall industrial vacancy of 14.7 percent as of the end of March.

A Colliers International study said Otay Mesa ended the first quarter at 13.8 percent direct industrial vacancy plus 0.8 percent of sublease space, for an overall vacancy of 14.6 percent.

“Otay Mesa, although expected to post positive net absorption figures, has far more ground to cover than its neighbors to the north,” the CBRE report stated. “Building sales activity will remain strong, but in order to maintain momentum, new opportunities for buyers to pursue will be crucial.”

Regardless of the survey, there is plenty of space to fill. A CoStar group report stated Otay Mesa had about 2.18 million square feet of direct vacant space as of the first quarter’s end, and 2.24 million square feet of overall vacancy, putting it higher than CBRE’s 2 million figure.

CoStar reported Otay Mesa had 161,317 square feet of net industrial absorption in the first quarter. The figure was 176,967 by CBRE’s accounting.

Both suggest interest is picking up, as does Colliers International, which tallied 193,147 square feet of net leasing.

“It feels like things are getting a little better,” Parker said, adding that the strength that was seen in the central part of the county during the past 12 to 18 months is finally making its way south.

The top lease that Parker identified in Otay Mesa was that of a 35-cent-per-square-foot transaction for 84,551 square feet at 1462 Corporate Center Drive for 78 months. The lessee is AV Trucking; the landlord is Morgan Stanley (NYSE: MS).

Parker said what is remarkable about that property in the Ocean View Corporate Center is that out of the 660,000-square-foot complex, only 10,000 square feet remains available for lease — even following the recession.

“By my estimate during the last 18 to 24 months, nearly 330,000 square feet has been leased in that one property alone,” Parker said.

A Colliers International report said along with AV Trucking’s lease, five other Otay Mesa properties had tenants occupying more than 20,000 square feet for the quarter.

Darren Mullins, a Cassidy Turley senior vice president, said while the leasing activity in Otay Mesa still is not as strong as he would like, if someone wants to purchase an industrial building between 20,000 and 40,000 square feet, they could be out of luck.

“These are really getting depleted,” Mullins said. “All the inexpensive buildings have sold.”

Mullins said at a time when industrial rents in Otay Mesa have been flat, industrial buildings are selling for 10 to 20 percent more than in spring 2013.

One approximately 24,048 square foot building in Otay Mesa, at 10030 Via de la Amistad on about 1.08 acres was sold for $1.55 million cash on March 31st to Advanced Mechtronics The price works out to $64.45 per square foot.

ImageThe Advanced Mechtronics property, which had been owned by Synergy Trust, was built in 1995 and is nearly 60 percent improved with office space.  Synergy Trust was represented by Icela Galaz-Wittkopp and Lee Suryani with Pacific Coast Commercial.  The Buyer, AMS Enterprises, LLC, was represented by Ryan Spradling with Cassidy Turley .

The average industrial lease rate in the Otay Mesa market was unchanged at 48 cents per square foot triple net from the fourth quarter of 2013 to the first quarter, according to CBRE.

CoStar placed the average industrial lease rate on Otay Mesa at a slightly higher rate than CBRE at 50 cents per square foot.

Lease rates are still low, but with a current floor of plus or minus 35 cents, depending on the survey, this is a notable improvement from 25 cents per square foot for some rates during the worst of the recession.

The Otay Mesa numbers come as the finishing touches are being put on the Otay Mesa Community Plan update.

Although zoning could eventually allow millions of square feet for additional industrial use in the unincorporated portions of Otay Mesa, Mullins has said the focus now is filling what exists within the city of San Diego.

Along with a proposal to build out its light and heavy industrial properties, Otay Mesa’s community plan also calls for nearly 6,000 additional housing units.

By THOR KAMBAN BIBERMAN, The Daily Transcript

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Otay Mesa leads 3Q industrial leasing gains in South County markets

Friday, November 1, 2013

South County industrial markets continue to improve across the board in the third quarter, led by Otay Mesa’s steady net absorption, according to a report by real estate services brokerage Cassidy Turley.

The South County industrial markets posted 385,800 square feet of net absorption in the third quarter, with all submarkets performing better than last quarter.

“Particularly encouraging was the activity in Otay Mesa which posted 130,655 square feet of new signed leases,” Cassidy Turley wrote. “These included 3D Robotics taking 32,420 square feet at Ocean View Hills Corporate Center, Recall Total Information Management leasing 41,047 square feet in the same project and San Diego Cold Storage taking 11,115 square feet of freezer space at the Britannia Industrial Park.”

“A larger number of new space requirements have surfaced and a few of those that had previously been put on hold have again become active,” the brokerage wrote.

Cassidy Turley reported that Otay Mesa’s direct vacancy dropped to 1.97 million square feet by the third quarter’s end.

The figure had been as high as 2.83 million square feet, or even higher by some accounts in 2009.

Otay Mesa still has the highest overall industrial vacancy in the South Bay at 19.6 percent, followed by 11.7 percent for San Ysidro, 7.7 percent for Chula Vista and 4.9 percent for National City.

Darren Mullins, a Cassidy Turley senior vice president — who along with associate Erik Parker compiles the report — said more tenants are touring Otay Mesa properties than two years ago.

“And the sales market is firming up a lot,” Mullins said.

After having experienced somewhat of a drought in the last five years, Otay Mesa posted two key land transactions in the latest quarter.

One was an approximately 8.86-acre site at the junction of Siempre Viva Road and Otay Center Drive that was purchased by Duran Freight for $4.7 million or $12.17 per square foot.

The second was the last remaining lot at Martinez Ranch Industrial Park, 7.63 acres on Britannia Avenue, purchased by the Hamann Companies for $2.74 million or $9 per square foot.

Building sales activity captured headlines this quarter with several transactions occurring throughout the market.

The survey, which also brings in Barrio Logan and goes as far north as Rose Canyon, noted the Metropolitan Transit System’s purchase of a 90,000-square-foot industrial building at 1202 Sigsbee St. in Barrio Logan for $16.61 million.

Other notable sales during the third quarter included an approximately 40,000-square-foot industrial building on 2.27 acres at 1010 W. 19th St.t in National City for $3 million to National City Partners.

“Industrial property sales flourished this quarter with owner/users dominating the landscape of buyer activity, while investors seeking double-digit returns through distressed assets were more often coming up short,” the report continued.

Mullins said with National City and Chula Vista virtually built out, as far as industrial development is concerned, “there are no large campus opportunities left from the Central County on down except for Otay Mesa.”

Notable leases in the county’s southern part included Recall Total Information Management’s 44-cent-per-square-foot, 126-month lease of 41,047 square feet, at 1462 Corporate Center Drive in Otay Mesa; FlyDive’s 85-cent-per-square-foot, 39-month lease for 13,310 square feet at 4630 Santa Fe St. in Rose Canyon/Morena; and Gary Manufacturing’s 76-cent-per-square-foot, 36-month lease for 12,705 square feet at 2702 Southport Way in National City.

The report stated that although the South County industrial market is better than it was during the recession, it still has a long way to go.

“While positive activity in the leasing market this quarter in the South Bay is encouraging, growth in this sector is expected to remain fragile and uncertain for the near term; especially in the southern-most submarket of Otay Mesa,” Cassidy Turley wrote. “For the most part, even though tenants will have the upper hand in lease negotiations of their stance, landlords will begin to exercise more resistance to free rent and other concessions. Regardless, landlords will face a challenging and long road ahead to grab the attention of new tenants, all while realizing limited rental rate growth.”

Mullins said new speculative development on Otay Mesa will be a few years off.

“The vacancy still has to come down quite a ways for that to happen,” Mullins added.

By THOR KAMBAN BIBERMAN, The San Diego Daily Transcript

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