MIG Real Estate Shells Out $56M for 376 KSF San Diego Office Portfolio
- Aug 16, 2011
August 16, 2011
By Barbra Murray, Contributing Editor
MIG Real Estate, keen on opportunities in San Diego’s Class B office market, has just acquired a five-building portfolio for $56 million. The quality properties provide the company with a value-add opportunity in the rebounding San Diego market.
Not every business is seeking a home in premier trophy buildings in San Diego; there remains a market for good space without the high-end bells and whistles. “It’s a more affordable alternative to be in functional, well-located buildings in popular submarkets,” Greg Merage, CEO of MIG, told Commercial Property Executive of the source of demand for Class B properties in the city.
The group of assets MIG just acquired includes the 88,300 square-foot Alta Sorrento at 9444 Waples St. and the 43,200 square-foot Cornerstone Court at 6020 Cornerstone Court West, both of which are located in the Sorrento Mesa submarket. Kearny Mesa Crossroads, a 126,900 square-foot, two-building property on Convoy St. in the Kearny Mesa area is also part of the collection, as is the 108,500 square-foot Rio Vista at 8885 Rio San Diego Dr. in the Mission Valley submarket.
“We are excited to have acquired suburban properties near residential areas and schools serving the employee workforce,” Merage said. “We will continue to look for additional opportunities with similar characteristics and qualities in San Diego.”
MIG plans to invest in some general cosmetic upgrades of the buildings it just added to its portfolio, all of which were developed in the mid-1980s. The properties benefit from being located in some of San Diego’s more successful submarkets. According to a report by commercial real estate services firm CB Richard Ellis, which represented the seller in the transaction, the average overall vacancy rate in metropolitan San Diego during the second quarter was 17.2 percent, while the averages in Sorrento Mesa, Kearny Mesa and Mission Valley were a respective 12, 13.1 and 14 percent. Additionally, there is little concern about new product coming on the market, as construction remained flat all around and the lull in activity is expected to continue for the rest of the year.
*This story was updated on August 16, 2011, at 4:46 p.m. EST.