Westcore Acquires Office/R&D Property for $12M

SAN DIEGO-Westcore Properties LLC waited little time in closing its first deal of 2005. After a record-setting year in 2004, which saw the company complete some $243 million in transactions, Westcore has acquired a five-building, 102,200-sf office/R&D property for approximately $12.8 million. Longwing Real Estate Ventures partnered with an affiliate of Westcore, Westcore Sandrock LLC, in the deal. That partnership acquired the portfolio from 805 Properties. The property is located on eight acres along the corner of Aero Drive and Sandrock Road in Kearny Mesa.The buy is a “classic opportunistic deal,” according to Westcore’s president and CEO Marc Brutten. Currently, the portfolio counts R&D buildings and a corporate headquarters building. “We plan to eventually redevelop the site to a mixed-use or office campus,” he tells Globest.com. He says Westcore hasn’t made a final decision on which direction to go yet. In the short term, Westcore intends to renew leases of three of the major tenants. “We’re going to renew three tenants in the projects, whose occupancies rollover shortly,” he says. “We’re looking to renew for a three-to-five-year period.” Two of the tenants are telemarketing firms while the third is Gamma Scientific, a maker of defense-related high-tech instrumentation, according to Brutten.In the long term, Westcore wants to demolish at least half of the buildings on site and then decide which route to go with the site. Brutten says that by the expiration of the new leases, Westcore should have maneuvered through the approval process and the property would be ready for the new development.For now, the portfolio is 50% leased and Westcore will look to fill space in the short term. “One of the buildings, that is 50,000 sf, is completely vacant,” says Brutten. Brent Wright and Bret Gossett of the San Diego office of CB Richard Ellis represented both parties in the transaction. In another deal, Westcore sold a 34,357-sf office/R&D building to the American National Red Cross for nearly $6.9 million. This property is also located in the Kearny Mesa area, at 3950 Calle Fortunada. “It was not Westcore’s intent to sell the property, but the Red Cross made an unsolicited offer that we accepted,” says Brutten. Westcore Properties represented themselves in the deal while Chuck Wasker and Stephen Dok of GVA IPC Commercial Real Estate Inc. represented the buyer, who intends to make the property its corporate headquarters for its San Diego/Imperial Counties Chapter. The nonprofit plans to move in this summer. “From the Red Cross sale, we plan to redeploy into a portfolio that we’re acquiring in Northern California,” says Brutten. “We have a $140-million portfolio we’re acquiring in Northern California. Right now we’re in the beginning of due diligence. So we can’t say any more about it.”The company set plans to invest $300 million in industrial, retail and office properties in 2005; however, its partner Longwing has allocated $150 million for investment for core property, according to Brutten. “This will allow us to acquire up to $500 million this year,” he says. Besides continuing to acquire opportunistic and core-plus properties, Westcore has announced that it is now aggressively seeking core assets as well. “By adding core properties to our investment criteria, we are now positioned to acquire the full spectrum of industrial, retail and office properties, both individually and on a portfolio basis,” says Brutten.