San Diego Business Journal: Stos Partners Picks Up $25M in Industrial Buildings
Stos Partners, a commercial real estate investment and management firm based in Encinitas, has gone on a buying spree that underscores the health of the industrial real estate market.
The company recently acquired four industrial buildings — three in San Diego County and one in Temecula — for a combined price of $25 million.
The San Diego buildings were in Kearny Mesa, Miramar and Otay Mesa — among the hottest submarkets in San Diego County for industrial property.
Cushman & Wakefield, in its market report for the first quarter of 2019, said that 3.3 million square feet of new industrial space has come on line over the past four quarters — more than four times the ten-year annual average of 724,000 square feet.
Even so, the brokerage firm reported that demand far outstrips supply, with most of the available industrial space built in 2010 or earlier — with 56 percent of the industrial space in the county built before 1990.
“At this rate, there is not enough new supply to satisfy tenant demand for new and modern industrial space,” Cushman & Wakefield reported.
CBRE reported that for the first quarter of 2019, industrial leasing activity reached 3.9 million square feet — 20.7% higher than the average quarter of 2018.
“Strong leasing activity did little to cut into demand, with more than 200 industrial tenants in the market for spaces 10,000 square feet or higher,” CBRE reported.
Exceptional Demand Drivers
Stos Partners Principal CJ Stos said each of their recent acquisitions “is situated in a prime location within their respective markets.”
Stos paid nearly $7 million for a 21,200-square-foot building in Kearny Mesa at 3670 Ruffin Road.
“Kearny Mesa is the most desirable industrial submarket in San Diego County, benefitting from exceptional demand drivers and strong economic fundamentals,” CJ Stos said.
Because demand is so high in Central County which includes Kearny Mesa, Cushman & Wakefield reported that rents there are the highest in the county at $1.35 per square foot compared with a countywide average of $1.10.
Bryce Aberg and Brant Aberg of Cushman & Wakefield represented Stos, and Brent Bohlken,Paul Britvar and Justin Maiolo of Newmark Knight Frank represented the seller, a private investor who was not identified.
In neighboring Miramar, Stos Partners acquired a 37,882 square-foot building at 9600 Kearny Villa Road for $6.3 million with plans to invest $500,000 in renovations with the hope of attracting a single tenant to lease the entire building.
Stos also bought a fully leased, 53,601-square-foot building in Otay Mesa at 9925 Airway Road for $6.1 million.
“This is a functional industrial asset offering unique cold storage space with efficient distribution in close proximity to the border,” said Jay Boyle, executive vice president of Stos Partners.
Louay Alsadek and Hunter Rowe of CBRE represented Stos Partners in the sale. Erik Parker, Joe Smith and John C. Smith of CBRE represented the seller, who was not disclosed.
In Temecula, Stos acquired a 65,315 square-foot building at 28410 Vincent Moraga Drive for $7.1 million with plans to make $1.2 million in renovations.
“There is tremendous unmet demand for well-located, highly functional industrial product in Temecula based on limited supply and low vacancy,” Boyle said.
Rob Gunness and Kevin Kelly of CBRE represented the seller, who was not disclosed.
Article source: sdbj.com