By Jon Peterson
A Beverly, Mass.-based family office, Brookwood Financial Partners, which owns a 173,146-square-foot office property in San Diego is looking to test the market by placing it for sale. The Bernardo Executive Center, which the company has owned since 2019 has not gone out with an official guidance pricing, however, given the building’s location, which is close to a 67-acre campus Apple recently acquired, it is likely to find interested investors.
The seller has awarded the listing on the property to the San Diego office of CBRE. The team working on marketing the assets includes Matt Pourcho, executive vice president of capital markets, and Matt Harris, an associate with the firm.
During the time that Brookwood has owned the asset, it has invested over $5.7 million in capital and tenant improvements, according to the property’s offering document. This work included an upgraded fitness center with showers and lockers, an acclaimed on-site café, enhanced lobbies and outdoor seating areas with WiFi connectivity. The new owner would only have to make only minor improvements to the property, such as installing new landscaping.
The office property, which was first developed in 1984, is a three-building asset with addresses of 16835, 16855 and 16875 West Bernardo Drive, and all of the buildings are three stories in heigh. According to the offering document, the asset is currently 74.4 percent occupied, and during 2022, the owners have added a total of 42,000 square feet in signed leases. Also, the property generates a net operating income of $2.1 million for the owners.
The property is considered a B-quality asset, although the buildings could be improved in the future to make them a B+ or A- asset. Because of that, the property is considered a value-add investment opportunity for a wide variety of investor types.
The asset has a very strong location, given a major transaction in the area that occurred earlier this year. As The Registry reported in July of 2022, Apple spent $445 million to purchase the former 67-acre Hewlett Packard campus, which is located adjacent to the Bernardo Executive Center. Apple plans to employ over 5,000 workers at the campus by 2026, which will certainly attract other technology and innovation firms into the market.
Bernardo Executive Center also has over 715 feet of freeway frontage and immediate access to the I-15 freeway. This offers a strong signage opportunity for any new company in the property since the highway frequently exceeds 220,000 vehicles driving by the asset each day.
The office market for the Rancho Bernardo area remains very strong. According to sources that track leasing information in the market, this area has a current vacancy of 7 percent, which is the lowest in San Diego, since many of the other submarkets have vacancies of 10 percent to 12 percent. Rancho Bernardo has had strong leasing activity, as well. Through the third quarter of this year, leasing totaled 466,639 square feet, more than the total leasing activity achieved during 2019.
