Davlyn’s director of acquisitions, Aaron Pacillio says that the firm has been “actively pursuing this property since the acquisition of the adjacent building known as Sage Creek in the late 1990’s.” He points out that the properties were originally developed as a single community in two separate phases. “Persistence has paid off and we can now reunite the properties and enjoy the economies of scale that come with running it as one community comprised of 180 units,” he says.

According to Pacillo, an extensive renovation was done to the building next door, which includes adding central heat and air, washers and dryers, new flooring, cabinetry, molding, paint, exterior architectural elements, etc. It is currently achieving $200 to $300 monthly premiums to the subject, says Pacillo.

According to Paul Kerr, president of Davlyn Investments, “This opportunity was based on honoring relationships; relationships with our broker Melinda who we pestered about the seller for a decade, relationships with our neighbor allowing us to work through any issues that could come up during the process and relationships with our investors who were comfortable enough with us to focus on the highly unique fundamentals of the opportunity at hand and not on macroeconomics of Europe, etc.” He went on to say, “It also allows us to execute our missions of providing our residents with a more modern, desirable environment and providing exceptional risk adjusted returns for our investors.”

The office acquisition was for a property construction in 2001 and located at 12220 Scripps Summit Dr. in San Diego. The seller was NK San Diego LLC of California.

Brent Wright, Matt Pourcho and Jed Stirnkorb of CBRE represented both buyer and seller.

Lending was provided by Eric Flyckt of NorthMarq Capital and Mike Atkins of Bank of America.

According to John Hale, a director of acquisitions at Davlyn, “even though the building is currently vacant, the supply-demand characteristics in the submarket, coupled with the unique amenities at the property, should allow us to attract the next large tenant in North County.” He adds that “Nokia occupied the building for the past 10 years, but it still shows like new. The modular furniture and cabling were all left in place. In addition, the property offers elevator-served subterranean parking, freeway visibility and close proximity to numerous retail dining options for our tenants.”

Kerr points out that “Given the building was vacant when we first considered this acquisition, it was critically important that we dig in to understand the market and this building’s place in that market. We came away from this analysis knowing that we were buying incredible real estate, at a price well below its replacement cost, in a stable, improving market,” he says. Adding to that comfort level, he says, was the fact that “the 196,000-square-foot vacant, sister-property lying adjacent to us sold to an owner-user during our escrow, as well as the strong interest we’ve had in leasing during the short time that we’ve been involved with the property.”