Education Company Signs Leases for 290,000SF in San Diego
- Feb 06, 2008
Kilroy Realty has just locked Bridgepoint Education Inc. into two leases for an aggregate 289,800 square feet of space at the REIT’s Kilroy Sabre Springs Campus in San Diego. Presently consisting of two structures totaling approximately 300,000 square feet, Sabre Springs sits in San Diego’s I-15 corridor near the intersection of Ted Williams Parkway and I-15. The first lease agreement allows Bridgepoint to expand its occupancy at the building at 13500 Evening Creek Drive by over 22,000 square feet to a total of 142,200 square feet. A second lease will give the school sole occupancy of Phase III of the office complex at 13480 Evening Creek Drive, which is presently in the construction phase and will yield a 147,500 square-foot building. Both leases are scheduled to expire in June of 2018. As is the case with most major metropolitan cities in California, San Diego continues to see significant demand in its office market. According to a report by real estate services firm Grubb & Ellis, the average direct vacancy rate in greater San Diego has inched up consistently since 2005, having reached 11.5 percent at the close of 2007. But the area is still a highly coveted market, and big chunks of office square footage are a rarity. “It’s fairly difficult to find large segments of space in the area,” Tyler H. Rose, Kilroy senior vice president and treasurer, told CPN today. “There are a couple of projects under construction, but it’s not easy to find that kind of space in San Diego, even with the increase in vacancy.” Kilroy has not disclosed the financial terms of its leases with Bridgepoint; however, asking rates in the city continue to climb, and increased 6 percent last year to a monthly triple-net rate of $3.24 per square-foot for Class A space. Headquartered in Los Angeles, Kilroy focuses its activates on the office and industrial real estate sectors, primarily in the coastal regions of Los Angeles, Orange County and San Diego County. As of the close of 2007, the REIT had a portfolio totaling 8.1 million square feet of office space and 3.9 million square feet of industrial space.