The demand for modern industrial space in the San Diego market has led to an existing office building being demolished to allow for the construction of a new industrial building. According to a release from a representative of CBRE Group Inc., the three-story office building at 8840 Complex Drive in the Kearny Mesa submarket of San Diego was recently demolished by the Casper Company to make way for the state-of-the-art industrial build.
The statement also says BYCOR General Contractors are set to begin grading and construction of the new industrial building this month to create a free-standing, roughly 24,188-square-foot building on a 1.54-acre parcel with a secure fenced area. The building will also feature multiple loading options, 24-foot clear height, full drive-around access, ESFR fire sprinklers, and heavy power for the entire building, according to the release.
Architect Ware Malcomb has designed a space that is flexible enough to provide a mix of office and warehouse (approximately 80 percent warehouse and 20 percent office space on one floor) or office, warehouse, and/or manufacturing space, the release says, adding that the building will be completed by May 2019.
CBRE’s industrial experts Bill Dolan and Ryan Sparks are representing the landlord, Pacific Southwest Mortgage Inc., which developed the site in the 1970s, the release says; Pacific Southwest is a privately owned commercial real estate company specializing in apartments, industrial, office and medical offices in the western United States.
Dolan is quoted in the release as saying, “This is a significant project because it is the first time we have seen an office building be completely demolished and replaced with an industrial building.”
Sparks comments in the release, “The industrial market is so incredibly tight, especially in Central San Diego. The strong demand from investors and owner/users has pushed values and lease rates to all-time highs. We have already received a significant amount of inquiries and interest from prospective tenants for this new building.”
While the office market is quite competitive in Central San Diego and redevelopment activity has been strong, the landlord felt for a long-term play it was more beneficial for the firm to build a new industrial building than to upgrade the existing office building, according to John Mulvihill, president and CEO of Pacific Southwest Mortgage Inc. In the statement, he says, “There is a strong demand for class-A industrial product, and there is a lack of newer, high-quality product for industrial users, especially in Kearny Mesa.”
The project is close to freeway access, restaurants, and residential communities, according to CBRE. The firm reports that Central San Diego had a strong second quarter, with 304,870 square feet of positive net absorption and that year-to-date leasing activity was 4.6 percent higher year-over-year with 2.7 million square feet of activity so far in 2018.