$8M Nets Office Asset in Downtown's Financial Core

SAN DIEGO-In another signal of investors’ growing interest in the Downtown office sector, the Arte Building has found a buyer after only a couple of months on the market. The circa 1935 office property has been sold to a group of investors by North Star Management, with Anthony Niakiani as managing member. The seller acquired the class B asset in 1997 from a bank that had taken over the property after the previous owner declared bankruptcy, according to Ben Tashakorian of Marcus & Millichap’s San Diego office. Tashakorian and Marcus & Millichap colleague John Erthein acted on behalf of North Star Management in the recent sale. When North Star purchased the Arte, the facility “was in terrible shape, so they went ahead and upgraded the building,” Tashakorian tells GlobeSt.com. The improvements, which took place over a five-year period, involved outfitting the concrete and steel-frame facility with new roofing, glass, HVAC and energy management systems, electrical and plumbing upgrades, three additional elevators, T1 communication lines, an access-card security station, and 31 supplementary parking spaces. The new ownership can now focus on the property’s potential for upside from the leasing angle, as the Arte Building was only 30% leased at the time of sale. The six-story, 64,565-sf asset is located at 1111 6th Ave. in the core financial district–an area that is enjoying increased attention as the Downtown renaissance blooms brighter with each passing month. “Job growth and rising absorption have set the stage for marked improvement in San Diego’s office market during 2004,” Tashakorian says. The Arte Building’s new ownership consists of Albert and Ethel Adatto, who are trustees of the Adatto family trust, along with Cethron Inc., Jonathan and Gillian Moss, Rob and Lise Adatto, Aaron Cooperband and Fumi Tanaka. Rob Adatto of Cethron Property Management, who is part of the new ownership, acted on behalf of the buyers. He tells GlobeSt.com that the new owners were attracted to the Arte Building because of its Downtown location and upgraded condition. “Of all the available properties in Downtown, it was really head and shoulders above the rest of them,” Adatto says. Although he points out that he hasn’t noticed a major pickup in leasing at the Arte Building as of yet, he does feel that “in the long-term, it is going to be an excellent spot to be.