John Hancock Swoops in on San Diego

The U.S. insurance company is expanding its San Diego portfolio in a big way.

By Gail Kalinoski, Contributing Editor

John Hancock acquires nine-building, 933,000 SF commercial office portfolio and two residential communities in San Diego, California. (PRNewsFoto/Manulife Financial Corporation)
6200 Greenwich Drive, Governor Pointe Business Park

John Hancock, the U.S. division of Toronto-based Manulife Financial Corp., is expanding its San Diego portfolio, adding nine office buildings and two multi-family communities.

The office portfolio has a total of 933,134 square feet and consists of nine buildings spread over four campuses. It includes Class A and Class B office properties in the Sorrento Mesa and Governor Park submarkets in north San Diego. The company said in a news release that the properties are near the University of California San Diego, the San Diego COASTER public transportation system and two main highways – Interstate 805 and Interstate 15. The portfolio was described as well leased with long-term tenants in the bioscience, technology and electronics industries.

“These properties fit in well with our existing San Diego portfolio of Seaview Corporate Centre and our multi-tenant industrial assets at Torrey Pines and Kearny Mesa,” Michael McNamara, senior managing director and global head of real estate investments, said in a news release. “These acquisitions allow us to both diversify our holdings and increase efficiencies as well as accommodate a wider group of tenants.”

A spokesperson for John Hancock declined to name the seller but both the San Diego Business Journal and CoStar Group reported the properties were purchased in two tranches from Kilroy Realty Corp. The Los Angeles-based real estate development and management firm announced in late April that it was selling 10 West Coast office buildings for gross proceeds of $309.2 million. Most of those properties were the San Diego assets. The first sale closed in April for $95 million and comprised three office buildings – 10770 Wateridge Circle and 6200 and 6220 Greenwich Drive. The final assets closed this week for $163 million and included properties at Sequence Drive and Directors Place, according to CoStar.

The 10th office property sold by Kilroy in recent months was a Redmond, Wash., office building leased by Microsoft Corp. that went for $51.2 million. Commercial Property Executive reported in early May that the Redmond and San Diego office buildings were being sold by Kilroy to recycle funds for new acquisitions and development projects.

John Hancock also purchased two residential properties in the San Diego area– Casa Lago Eastlake – East and Casa Lago Eastlake – West. The two complexes are located in a master-planned community and have a total of 427 units. They were built in 2013 on approximately 20 acres in Chula Vista, 14 miles southeast of San Diego, by The Resmark Cos. and ColRich.

The company declined to release a price paid for the residential communities but CoStar reported Resmark sold them to John Hancock for $142.5 million, or about $334,000 per unit.

“These acquisitions are excellent examples of our team’s focus on strategic, long-term growth,” Kevin Adolphe, president & CEO of both Manulife Real Estate and Manulife Asset Management Private Markets, said in the company release. “Eastlake is considered to be one of San Diego’s best residential communities and our newly acquired office properties in San Diego are highly complementary to our existing portfolio. These are exciting investments that we are proud to add to our portfolio as we strengthen our commitment to the San Diego market.”

The firm operates as John Hancock Real Estate in the United States and Manulife Real Estate elsewhere around the world. The company’s portfolio includes office and industrial properties and retail and multi-family residential properties in Canada, Asia and the U.S. As of March 31, the company had $13.2 billion in assets totaling more than 55 million square feet.

In June, the company added a Chicago trophy office building with the $344 million purchase of One South Wacker, a 40-story, 1.2 million-square-foot, Class A property in the city’s CBD.