Arden Acquires Sorrento Mesa Trophy Property

SORRENTO MESA, CA-Arden Realty Inc. has planted another major footprint in San Diego County. In its latest move, the Los Angeles-based REIT has acquired Sorrento Mesa Corporate Center from Sorrento Towers LLC for $185 million. The buy gives Arden 25% of the 2.3 million-sf class A office product in the Sorrento Mesa submarket and a 6.8% stake in San Diego County’s office inventory.The class A property counts 608,000 sf, with four office buildings totaling 555,000 sf and a 53,000-sf retail center. Major tenants include Texas Instruments, Scudder Investments, Bank of America and Starbucks. Although the property has the strong list of national tenants, the occupancy sits at 74%, so repositioning the project will be the major point of business. According to Arden execs, the property has a huge upside. “The Sorrento Mesa Corporate Center, with 26% vacancy, will allow us to add value through leasing in an improving market over the next 12 months.” says Victor Coleman, Arden president and COO. An exec with Secured Capital Corp., who was marketing the property, sees optimism in filling office space in the area. According to Adam Edwards of Secured Capital’s San Diego office, market conditions in San Diego, and more specifically Sorrento Mesa, are expected to continue tightening as countywide land availability continues to decline.In another deal, Arden has also announced plans to acquire 5670 Wilshire Blvd. for $93 million. The Beverly Hills class A building counts 408,000 sf and is 92% leased with Infinity Broadcasting, the Securities and Exchange Commission and Singapore Airlines among its major tenants.But San Diego County is an area where Arden has been particularly active with its portfolio in recent months. In January, the REIT was involved in buy and sale deals with San Diego-based The Shidler Group. On the disposition side, Arden sold a 19-building, 1.1 million-sf portfolio of office and R&D properties located in San Diego and Los Angeles for $142 million. Of the portfolio, 10 of the buildings are located in three business and technology parks in San Diego. The buildings are B and B-plus properties, while Arden’s strategy is to hold class A properties in their core areas. Evidence of that is the company’s acquisition of Washington Mutual Tower. Arden paid Shidler $48 million for the 12-story, 180,000-sf class A building. The property counts a 792-stall adjacent parking structure and is located at 707 Broadway in downtown San Diego. The building is two blocks from another class A, Arden-owned property, 701 Broadway.