The deal is the second recent major pickup in the San Diego area for Kearny. Last month, the Los Angeles-based firm acquired 311.4 acres of raw land in Otay Mesa for $23.3 million.
For the Temecula buy, Kearny acquired the 100% occupied space through its $100 million Kearny Industrial Fund. Built in 1991, the facility serves as the headquarters for Walker Wood Products Inc., a family-owned cabinet manufacturing company that serves Southern California homebuilders. The deal was structured as a sale-leaseback with Walker agreeing on a 10-year deal. Pat Scruggs, Gary Stache, Anthony Delorenzo and Rob Gunness of CB Richard Ellis represented both parties.
Kearny entered the Temecula market in 1999. The firm has developed nearly 550,000 sf of industrial space in the area. Tops among developments is the 412,000-sf build-to-suit for The Scotts Co. The other major project is Remington Business Center, which totals 24 industrial condominium units.
As for the Otay Mesa project, the land surrounds the planned SR-11 highway extension. When completed, SR-11 will "connect Hwy 125 and Hwy 905 to the proposed third US-Mexico border crossing-port of entry," according to officials with Colliers International, who represented the buyer. Kearny plans to develop Otay Crossings Commerce Park on the site.
According to information obtained from Kearny, the firm plans three million sf of industrial space at a cost of roughly $400 million. Kearny partnered with Pacific Coast Capital in the deal. Kearny officials say they're looking at a three-year timetable to work through entitlements on the raw land.
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