EastGroup Properties Buys San Diego Viva Logistics Center II for $135M
An affiliate of IDS Real Estate Group sold the 547,000-square-foot asset, which is located in the Otay Mesa area of San Diego.
EastGroup Properties has acquired Viva Logistics Center II in the Otay Mesa area of San Diego from Siempre Viva Industrial II, an affiliate of IDS Real Estate Group, for $135 million. The class-A, four-building property totals 547,000 square feet on 29 acres.
Located at 8690 Kerns St., 2660 Sarnen St. and 8863 and 9043 Siempre Viva Rd., the property was built between 2001 and 2003, and features cross-dock and rear-load buildings with clear heights ranging from 24 to 32 feet, ample dock loading positions, wide column spacing, deep truck courts, low office finish and ample parking. The property is less than two miles from the Otay Mesa port of entry.
JLL director Ryan Spradling, one of the brokers that worked on the deal, called the property one of the “premier industrial projects in the market.” The property also offers significant upside through filling the current vacancies.
San Diego has a 3.9% industrial vacancy rate, and according to a recent report Marcus & Millichap, industrial rents in the market have increased 4.7% to $16.80 per square foot. Rents have grown consistently each quarter since the start of the pandemic. Limited supply is contributing to the increase in asking rents. As rents have increased each quarter, the vacancy rate has also inched down. In the fourth quarter, San Diego had a 4.4% industrial vacancy rate, down 70 basis points from the previous quarter. The vacancy rate has been on a downward trend since 2019, when the rate peaked at nearly 6%, according to the report.
Robust new construction activity will increase the industrial supply in the market by 2.9%. The pipeline mostly consists of low finish warehouse product. The activity includes two industrial projects at Brown Field Technology Park in Otay Mesa, totaling 200,000 square feet from Murphy Development.
In addition to Spradling, senior managing director Mark Detmer, senior director Ryan Sitov, analysts Taylor Neiman and Makenna Peter of the JLL Capital Markets Investment Sales and Advisory and VP Andy Irwin and EVP Greg Lewis with the JLL Industrial Brokerage team represented the seller in the transaction.