SAN DIEGO—An attractive location for tenants seeking convenience for their employees and proximity to research institutions and companies, Sorrento Mesa shines as a flex-industrial submarket, Goldman Sachs Asset Management Private Real Estate co-head Joseph Sumberg tells GlobeSt.com. As we recently reported, the firm, in a joint venture with Montana Avenue Capital Partners LLC, recently acquired Centerpark Plaza, a 204,000-square-foot, multi-tenant industrial-flex campus in Sorrento Mesa submarket with eight flex industrial buildings and one office building.
Dekel Capital, an L.A.-based real estate merchant bank that specializes in sourcing and placing equity and debt for middle-market commercial real estate developers and investors, placed core-plus JV equity of an undisclosed amount on behalf of Montana. The proceeds were used to acquire and reposition Cernterpark Plaza.
We spoke with Sumberg about this submarket's appeal and what flex-industrial users are seeking in their space.
GlobeSt.com: How has Sorrento Mesa become a leading flex-industrial submarket in San Diego?
Sumberg: We believe that Sorrento Mesa, situated in central San Diego County, offers an attractive location for tenants seeking convenience for their employees and proximity to research institutions and companies. The area is located less than 20 minutes from Downtown and very close to the intersection of I-805 and I-5, providing easy accessibility for employees living in surrounding residential areas. Sorrento Mesa benefits from its close proximity to UC San Diego and the major national biotech hub in Torrey Pines, both of which sit west of the freeways and have contributed to the formation of a cluster of educational/research institutions and corporations with an accompanying well-educated employment base. Flex-industrial product appeals to a range of users, including life sciences and technology companies, which are prominent in the submarket and can utilize flex industrial space for a variety of business functions.
GlobeSt.com: What are the necessary elements for strong flex-industrial properties?
Sumberg: Strong flex-industrial properties typically require physical attributes that can support a variety of uses (e.g., office, lab/R&D, manufacturing and warehouse). Some of these physical elements include high ceilings, open floorplates, easily adjustable configurations and sufficient parking. As flex-industrial product in Sorrento Mesa has become increasingly attractive to a broader range of industries, we believe that buildings like those at Centerpark Plaza with large windows and the potential for easily incorporated indoor/outdoor space are especially attractive for tenants looking for flex-industrial properties. We also believe that offering “community”-type amenities such as a shared outdoor seating/eating area and locker rooms with showers and bike-friendly improvements are important to many tenants in the Sorrento Mesa submarket and will be a continued differentiator for Centerpark Plaza going forward.
GlobeSt.com: What other areas of San Diego have this potential?
Sumberg: Other submarkets such as Kearny Mesa, Miramar and Carlsbad could present opportunities for flex-industrial development.
GlobeSt.com: What else should our readers know about this transaction?
Sumberg: With the addition of Centerpark Plaza, Goldman Sachs Asset Management Private Real Estate now owns 2.1 million square feet of commercial properties in the western United States.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
