By THOR KAMBAN BIBERMAN, The Daily Transcript
Thursday, October 17, 2013
In what has become an ongoing theme, a 229,694-square-foot office building within the Faraday Corporate Center in Carlsbad has been sold for $40.4 million.
This latest sale marks the fourth major transaction involving a Carlsbad office building since June. That tally has reached $116.4 million worth of transactions and more than 550,000 square feet of buildings within the past few months.
The buyer of the property at 2200 Faraday Ave. is a unit of Regent Properties of Los Angeles. The building, originally constructed in 1997 for Puritan Bennett, is adjacent to a 119,561-square-foot office building at 2210 Faraday also within the Faraday Corporate Center that wasn't part of this transaction.
Both of these buildings are within the 560-acre Carlsbad Research Center business park.
Regents took out a $28.21 million loan from General Electric Capital Corp. to purchase 2200 Faraday.
Aric Starck, Rick Reeder and Dennis Visser of Cassidy Turley represented the buyer and the seller in the transaction.
A CoStar survey within the past month pegged the occupancy of the 2200 Faraday building at 86.8 percent leased with 38,322 square feet of available space. The major tenants include Rockstar San Diego Inc.; 3DLegend Films Inc.; Net Gear; and Catalina Restaurant Group.
The building's amenities include showers and lockers, second-floor balconies, 12-foot finished ceilings on the first floor, two 5,000-pound capacity freight elevators along with the passenger elevators, video conferencing facilities, computer training facilities, a dock-high loading facility with a 60-foot concrete apron and an updated fiber optic network that is currently being installed.
The 2200 building has an average lease rate of $1.85 per square foot per month plus utilities. The amount provided for tenant improvement allowances is negotiable.
The seller of the property was a unit of New York City-based DRA Advisors with David Luski as president and CEO.
The adjacent 2210 Faraday building, which has come to be known as Research Center Pointe, was last sold for about $13.43 million to a unit of The Paragon Co. of La Jolla in July 2012. Tenants in that building include NemcoUSA Inc. and Medtronics.
That building was 67.9 percent leased, according to CoStar.
Both these buildings are proximate to such corporate neighbors as Daimler-Chrysler, Isis Pharmaceuticals, Callaway Golf and Fortunes Brands, and are close to McClellan-Palomar Airport and Interstate 5.
The 2200 and 2210 buildings were part of a $24 million sale of buildings and land to the Equus Realty Advisors (later known as Equastone) investment firm in 2002. Equus subdivided the property into four parcels in 2005 to include the existing buildings and two then-vacant parcels totaling 4.56 acres. A total of 10 buildings ranging from 5,000 to 15,000 square feet were constructed on the two parcels that again are under separate ownerships from the initial office buildings.
All during the mid-2000s, the values of the buildings were increasing -- so much so that the 2200 building alone sold for $41.5 million to the DRA Advisors unit in January 2007.
While those values may have plummeted during the recession, the economy has been strong enough lately that the price of the 2200 building is nearly back to where it was.
Regent Properties has been quite active in the Carlsbad office market and in other parts of San Diego County during the past few years. The L.A. investment firm paid nearly $8.73 million for the 103,547-square-foot Palomar Terrace office building at 3115 Melrose Drive in Carlsbad in June of last year.
Regent doesn't only buy and sell office buildings, it has been buying apartment and single-family residential land, as well as retail-zoned lots particularly in and around Inland Empire markets of Murrieta, Lake Elsinore and Riverside.
New York investment firm DRA Advisors has also been a buyer and seller of San Diego-area real estate as well as far beyond this market for many years. It sold the 74,600-square-foot Plaza del Mar shopping center in Del Mar Heights for $46.1 million in cash to GLL Properties of Orlando, Fla., in 2010, and teamed up with San Diego-based Westcore Properties to purchase an 11.1 million-square-foot industrial portfolio in 110 buildings in Sacramento, St. Louis and Indianapolis late last year.
Meanwhile, the 2200 Faraday sale is just the latest in a string of office building sales in Carlsbad. Across the street from the Faraday Corporate Center, a Los Angeles-based Alvarez & Marasal entity paid $12.7 million for a 65,840-square-foot building in the Faraday Research Center at 2251 Faraday Ave. in September.
The 80,862-square-foot Pacific View Corporate Center at 5759 Fleet St. sold to Drawbridge Realty Trust for $22.25 million; and Regent Properties, as a seller this time, sold the 177,149-square-foot Ocean Terrace Corporate Center at 5740-5770 Fleet St. for $41.17 million to San Diego-based BBL, Inc.
Both transactions were concluded within the past 90 days.