Set within San Diego’s active Otay Mesa submarket, a 61,740-square-foot industrial property has come on the market for a price of $16,975,000, or roughly $275 per square foot. Otay Commerce Center is located on 7.38 acres at 9840 Siempre Viva Rd. in the San Diego submarket of Otay Mesa, where businesses are benefiting from the proximity of the US-Mexico border, taking advantage of cross-border distribution and manufacturing.
Built in 1992, the warehouse building benefits from 24-foot ceilings and 8 loading docks with the space divisible into three different size configurations of 20,640 square feet, 42,000 square feet or 61,740 square feet. The property was recently upgraded to include new LED warehouse lighting, new skylights, parking lot upgrades, new overhead doors, new exterior paint, and landscaping.
Otay Commerce Center was last purchased in May of 2022 for $10 million by an entity associated with Lemon Grove, Calif.-based Homan family. The industrial property is offered for sale by Greg Pieratt, vice president and principal with the Lee & Associates-North San Diego County Office in Carlsbad.
According to the Kidder Mathews fourth quarter of 2022 Market Trends San Diego Industrial Report, investors remain active throughout San Diego county, however, deal flow has slowed in the second half of 2022 amid the high interest rate environment. Because of this, pricing may soften into 2023 and transaction levels are expected to be moderate in the near term, according to the report. In addition, rising construction materials costs and labor shortages may likely pose a challenge to developers in 2023. Otay Mesa continues to be an active market, however, with much of the construction pipeline concentrated in this submarket.
E-commerce and online retail are expected to slow in the coming year, reflecting the economic slowdown and cooling economy, Kidder Mathews report states. However, industrial assets are anticipated to continue to be among the top sectors in 2023. The San Diego industrial market will remain firm-footed during this year, since it remains a top life science and biotech hub, as well as leads in last-mile distribution.
According to another industry report by brokerage firm JLL, the largest transactions in the Otay Mesa submarket during the fourth quarter of included: Hamann Companies completing PROTO Logistics Center, two buildings totaling 128,000 square feet that delivered 100 percent pre-lease in Otay Mesa. The largest projects to break ground in Otay Mesa during the fourth quarter were two buildings at the Sanyo Logistics Center totaling 243,000 square feet and two additional buildings totaling 203,000 square feet at phase two of Brown Field Tech Park. JLL concludes in its report that the San Diego industrial market is well-positioned due in part to a lack of options larger than 100,000 square feet available for direct lease, which continues to put upward pressure on asking rents.