New Tenant Signs on at Legacy Sabre Springs

SAN DIEGO, CA-Leasing activity seems to be picking up at the Legacy Sabre Springs office complex located in the I-15 Corridor, as New Century Financial Corp.’s subsidiary New Century Mortgage Corp. has signed on for 13,606 sf here. The circa 2003 asset is experiencing an uptick in leasing this year, according to CB Richard Ellis Jeb Bakke, who worked on the deal. When the Legacy Sabre Springs project opened in early 2003, “there was interest generated,” notes Bakke, explaining that “it was just difficult for those companies to make decisions last year, apparently.” He cites the uncertainty in both the national economy and world affairs as factors that may have caused potential tenants to back away from any definitive lease negotiations. However, Bakke points out that “in 2004, companies came out of the chute ready to make some decisions and the momentum has been really strong in actually getting these leases closed that we’ve been working on for some time.” In the case of New Century Mortgage Corp., it took the firm’s decision makers nearly a year to decide to move into Legacy Sabre Springs. The company, which is currently located in the 4S Ranch area of Rancho Bernardo, will be moving into the complex sometime this month. It will occupy suite 400 of the building located at 13520 Evening Creek Dr. North, according to the terms of the five-year, $4.9-million lease. New Century Mortgage Corp.’s new space will house its wholesale mortgage operation, human resources, and training and internal audit departments. The new lease has brought occupancy at Legacy Sabre Springs up to 64.3%, according to Bakke. He does point out that between LOIs and signed leases, the property is actually more than 90% leased, which has strengthened landlord Legacy Sabre Springs’ negotiating power. Tenants at the two-building, 281,830-sf complex include Chase Automotive Finance, Intel, Abbott Laboratories, the Raymond J. Lucia Cos., and Keller Williams Realty. In the recent transaction, New Century Mortgage Corp. was represented by Steve Rosetta of Corporate Real Estate Advisors. Bakke, Brent Wright and Bret Gossett acted on behalf of Legacy Sabre Springs.Bakke says potential tenants are feeling the pressure to sign leases in San Diego, since all the factors are in place for an upswing in rents. “Job growth is strong, vacancies are down, rents are firming up, and absorption is predicted to be strong,” Bakke tells GlobeSt.com, adding that “if you are a tenant, all those things mean that your rent is going to go up if you delay.” CBRE’s independent subsidiary Torto Wheaton Research is predicting a rental rate growth of 11% over the course of 2005, with the office vacancy level expected to reach 6.8% by year-end 2005, Bakke notes.