San Diego Monthly CRE Wrap-Up (Feb. 2020)

VA-leased portfolio lands $703 million. The Navy moves closer to NAVWAR redevelopment. Mixed-use Torrey Highlands project breaks ground. Here's our February selection of San Diego must-reads.
MERGE 56
MERGE 56. Image courtesy of CBRE

San Diego’s development scene sprang to life in February, as major players—both public and private—began moving forward on several projects across a range of property types, from hospitality to office. Here’s Commercial Property Executive‘s wrap-up of San Diego’s must-knows for the month: 

1. FINANCING – VA-leased medical portfolio scores $703 million financing package.

Gantry Inc. arranged the package, comprising $373 million in construction and $330 million in permanent financing, to develop one clinic in San Diego and another in Chula Vista, along with four other developments across three states. The Department of Veterans Affairs has leased the full portfolio, which is slated to open in 2021.

2. DEVELOPMENT – NAVWAR redevelopment moves closer to start.

The U.S. Navy is looking to sell or lease the site of its Naval Information Warfare Systems Command for a major, private redevelopment project, according to KPBS. The division currently occupies World War II-era hangars at 4301 Pacific Highway. The project will include a significant infrastructure overhaul: San Diego County’s transportation planning agency signed an agreement with the Navy to jointly develop a transit center at the site.

3. DEVELOPMENT – Torrey Highlands mixed-use project breaks ground.

Sea Breeze Properties plans to deliver MERGE 56, a 40-acre project south of the intersection of the Ted Williams Freeway and Camino del Sur, in early 2022. The development is set to include approximately 450,000 square feet of office and retail space, a boutique hotel and 242 residential units.

4. PEOPLE – Colliers names executive vice president in Carlsbad.

Jay Patel will specialize in investment sales for net-leased properties across the U.S. He previously served as executive director with Cushman & Wakefield. Throughout his career, Patel has closed transactions valued at more than $1.5 billion. He holds a Bachelor of Arts in Business Administration from the University of San Diego.

5. DEVELOPMENT – Gaslamp Quarter hotel begins renovations.

Pebblebrook Hotel Trust is working with Margaritaville Enterprises to transform the Solamar Hotel into the metro’s second Margaritaville property. The owner acquired the 235-key building at 435 Sixth Ave. in 2018 and estimates the total cost of renovations and reflagging at $20 million. The Margarita Hotel San Diego Gaslamp Quarter is expected to open in 2021.

BONUS READ: CBRE’s big-box report shows the highs and lows of 2019 for San Diego’s retail market. Although several major stores filed for bankruptcy with plans to shutter locations in the metro, retail investors continued to seek ways to reinvent brick-and-mortar through property renovations and a shifted focus to experiential elements. Read more about it here.