SAN DIEGO – Sept. 15, 2014 – Lionstone Investments, on behalf of an institutional client, has acquired the iconic San Diego Tech Center, a technology and creative office campus in Sorrento Mesa, CA.
The nine-building trophy project, which is positioned along Scranton and Barnes Canyon roads in the Sorrento Mesa technology hub, totals 655,643 square feet and includes entitlements for up to an additional 1.2 million square feet of new development. The campus is located immediately adjacent to the corporate headquarters of Qualcomm, Sorrento Mesa’s largest tenant with more than 4.6 million square feet of office space in the area.
Lionstone’s operating partner for this acquisition is Locale Advisors. “This is a very exciting project for us as the San Diego Tech Center was way ahead of its time and has been the most visionary and successful technology campus in the county since its construction in the mid-1980s,” said Phil Monroe, principal with Locale Advisors.
“San Diego Tech Center has an irreplaceable seven-acre park and lifestyle amenities create a unique employee experience,” Monroe said. “We look forward to taking the creative infrastructure that already exists at San Diego Tech Center to an exciting new level to ensure it remains the most preferred technology/creative campus in San Diego County, providing companies unequaled opportunity for tenant attraction and retention.”
San Diego Tech Center includes an eight-story office building and eight one- and two-story R&D buildings. It is home to the popular Karl Strauss Brewery restaurant and bar, as well as numerous indoor and outdoor amenities including a fitness facility, Pilates studio and locker room, lap pool, basketball and volleyball courts, all of which are set among a lushly landscaped Japanese garden in the park.
The campus is leased to investment grade companies including Sony Computer Entertainment America, Qualcomm, Novatel Wireless, Combined Conditional Access, and Samsung. The prior ownership invested $6.3 million in capital upgrades including LEED Gold certification, gym renovation, restaurant renovation, and landscaping and signage improvements.
“This is an exceptional economic asset perfectly positioned to serve the fast-growing and highly innovative technology industries,” said Jane Page, Lionstone Investments’ CEO. “The campus is ideally positioned in one of Southern California’s most sought-after corporate hubs, and has exceptional ease of access to the I-5 and 805 freeways. Lionstone uses proprietary research and analytics along with the insight of its partners to identify productivity-driven investments in irreplaceable locations.”
According to Monroe, other than significant capital upgrades throughout the existing campus, plans for future development have not been announced but will likely focus on attracting build-to-suits or phased development on other parcels over time.
“This is the only campus in mid-San Diego County with such a sizable supply of entitled, developable land,” Monroe said. “This affords additional flexibility and upside as market dynamics continue to stabilize creating more demand for space in the coming years.”
In the transaction, Lynn LaChapelle and Bob Prendergast of Jones Lang LaSalle (JLL), along with Adam Edwards, KC Scheipe and Justin Shepherd of Eastdil Secured, represented both parties. JLL will continue to manage leasing efforts for the campus through Jay Alexander, Chad Urie and Tim Olson.