Irvine Co. Buys San Diego Office Complex for $105M
Purchase Marks Second in Del Mar Heights for Region’s Largest Office Owner
The Irvine Company has acquired the two-building, 197,862-square-foot Gateway at Torrey Hills office complex in San Diego’s Del Mar Heights submarket for $105 million, or about $531 per square foot. The seller of the property, at 3570 and 3580 Carmel Mountain Rd., was Prudential Insurance Co. of America.
This was the second office purchase in that submarket by Newport Beach-based Irvine Co., which is San Diego County’s largest holder of office assets with more than 8 million square feet throughout the region. In September the firm purchased the two-building Township 14 office property in Del Mar Heights for $86.5 million, marking its entry into the Del Mar Heights neighborhood.
“Our decision to acquire Gateway at Torrey Hills is another sign of our long-term faith in San Diego as a nationally recognized center of innovation,” said Doug Holte, president of Irvine Co. Office Properties, in a statement.
Located near Interstate 5, Gateway at Torrey Hills was developed in 2008 and consists of two four-story buildings, with current tenants including BDO USA, Mindbody, Inc. and the law firm Mintz Levin. On-site amenities include a gym and locker facility, food service and outdoor gathering spaces.
Rick Reeder and Brad Tecca of Cushman & Wakefield’s capital markets group represented the seller, with Cushman leasing specialists Brian Starck and Joe Anderson providing market advisory services. Irvine Co. handled the acquisition in-house.
"The property was approximately 80 percent leased to a dynamic tenant roster that offered the ideal balance of secure income and potential upside with a clear path to stabilization,” Reeder said in a Cushman statement that did not disclose the seller.
In its own statement, which did not divulge the price or seller, Irvine Co. said it plans to add and enhance the outdoor workspaces and related services at the Gateway at Torrey Hills.
About half of Irvine Company’s San Diego office portfolio by square footage is in University Town Center, with long-time holdings such as La Jolla Gateway, The Plaza, La Jolla Square and One La Jolla Center. It also owns six office towers in downtown San Diego, with other office and multifamily holdings in Sorrento Mesa, Mission Valley and UTC.
Del Mar Heights, part of San Diego’s larger Carmel Valley submarket, has traditionally been among the region’s most sought-after and expensive office neighborhoods, thanks to its central location and high-end demographics. The latest fourth-quarter 2017 report from Cushman & Wakefield showed the neighborhood’s average Class A office rent was $4.42 per square foot, well above the San Diego County average of $3.32.
Please see CoStar COMPS #4120310 for more on the latest transaction.