A partnership between Kearny Real Estate Company and PCCP has broken ground on what will become the largest industrial development in San Diego in the last decade, Otay Crossings Commerce Park. The $40 million, 311-acre property is located in Otay Mesa and will be positioned along the future SR-11, which will connect the existing 905 interstate and 125 toll road and will become the future point of entry between US and Mexico.

The developers have reserved 120 acres of the project for CalTrans to complete the final 1.8 miles of the road. The remaining acreage will create industrial lots for warehouse and distribution facilities. “The phase that we are currently in is setting the edges and providing the back-up infrastructure to complete the future third phase of SR-11 down to the future point of entry, which will be the new commercial border crossing between the US and Mexico,” Jeff Givens, SVP of Kearny, tells GlobeSt.com. “That work is underway, and it will probably be an 18-month project to complete the road starting in Spring 2019. That connector, SR-11, will connect travel to the existing 905, which is the east-west freeway, as well as the 125, which is the new north-south toll road in San Diego County. Ultimately, we will have 142 acres of finished lots enveloping SR-11.”

The San Diego market has a sub 5% vacancy rate, and demand for new, premium industrial space is high. Like in many markets throughout California, developable land is scarce, keeping supply levels down. The dynamic—one that California knows all too well—is the reason significant developments like this have become uncommon. “Industrial land is at a premium and it is harder and harder to come by,” says Givens. “There are very few places now that you can compile and put together a site of scale and of size, especially in this case being 311 acres.”