Kearny Real Estate Grabs 232 KSF Downtown San Diego High-Rise

Kearny Real Estate Co. has acquired the Union Bank Building, a 232,098-square-foot office building at 530 B St. in downtown San Diego, from Union Bank N.A.

KEARNYKearny Real Estate Co. has acquired the Union Bank Building, a 232,098-square-foot office building at 530 B St. in downtown San Diego from Union Bank N.A.

Union Bank will continue to occupy a major portion of the LEED Gold Certified office building through a new long-term lease and will retain building top signage, however, Kearny will rebrand the building as 530 B.

“It’s perfect for what we do. This is a value-add play for us,” John Bragg, a partner at Kearny, who heads the firm’s San Diego office, told Commercial Property Executive. “We’re going to fix it up and try to lure tenants in a market that we believe is going to grow.”

Originally constructed in 1966 and renovated in 1992, the Union Bank Building had stood as the tallest building in San Diego for more than 20 years. Characterized by its floor-to-ceiling windows, every floor offers 360-degree views of the San Diego Bay, Pacific Ocean and Balboa Park.

Kearny’s San Diego office has been a tenant of the building since 2010, and Bragg said he was interested in buying the property before it even went on sale.

“It’s classic ’60 architectural design,” he added. “We like where it is and we like what it is. We like the dynamic of the 24/7 aspect of the city, and we like that all the best floors in the building (the high ones) are empty.”

Kearny will undertake a $15 million capital improvement program that will include a significant overhaul of the building’s restrooms, updating the common areas with new colors and upgrading a new indoor/outdoor experience of a previously under-utilized 12,000 square-foot patio.

“This patio is one of the reasons we bought this iconic building. It gives us the opportunity to create a wonderful indoor/outdoor experience for our tenants,” Bragg said. “San Diego is nice most times of the year, and this is a private terrace that we’ll put some nice furnishing in and Wi-Fi and if you’re in the building, you can go out and enjoy.”

Located in what is considered the old part of San Diego, close to the Civic Center, the Union Bank Building was 57 percent leased at the time of the sale, including tenants such as the San Diego Economic Development Corporation, Peterson Price, Messner Smith and Peterson & Associates.

According to Bragg, businesses occupying 10,000 square feet or less make up approximately 85 percent of the office space in downtown San Diego and he feels that because the building offers 9,250 square-foot floor plates, it provides unique full-floor opportunities for the mid-size tenants that dominate the downtown market.

Louay Alsadek and Evan August of CBRE represented Union Bank in the transaction. Ryan Grant, Andrew Taylor and Jim Rinehart of CBRE were retained as leasing agents.