SAN DIEGO, Calif. – Stos Partners, one of the most active commercial real estate investment and management firms in Southern California, in a joint venture with Long Wharf Capital, has announced the sale of a 55,000 square-foot industrial asset in the Miramar submarket, a prime infill industrial area of San Diego, California, to EverWest Real Estate Investors for $17.3 million.
Stos Partners and Long Wharf initially acquired the asset for $11 million in early 2020. Together, the team capitalized on the region’s robust fundamentals and sold the property ahead of schedule, notes CJ Stos, Principal at Stos Partners.
“Our initial plan was to execute our proven business strategy of acquiring and repositioning well-located properties that are poised to deliver long-term value for buyers,” says Stos. “Ultimately, based on today’s fast-moving market, we received a competitive offer that we simply could not pass up prior to fully implementing our value-add strategy.”
Drawing upon its extensive experience and in-depth knowledge of the San Diego market, the firm has observed high demand from businesses and investors for industrial properties in the area as the sector continues to perform exceptionally well, adds Stos.
The San Diego market saw one of the lowest vacancy rates in the nation at 2.3% in Q1 of this year, signaling clear interest in well-located industrial spaces in Southern California. In fact, leasing activity rose by 300,000 square-feet in Q1 to 2.6 million square feet. This is partly caused by the continuously growing demand for infill industrial assets, coupled with the lack of new supply due to diminished buildable land and high construction costs, according to Jay Boyle, Executive Vice President at Stos Partners.
“We immediately recognized this asset’s potential, based on its ideal location with easy access to North and South San Diego,” says Boyle. “In addition, we quickly identified the property’s value proposition, including flexible hold-period options, and acquired it with below-market rents at a strong basis.”
The Stos team was able to highlight to potential buyers the property’s desirable location in a centralized industrial submarket, ultimately making it a sought-after building for industrial users, notes Boyle.
Demand for industrial space in San Diego is also being driven by the burgeoning life sciences market, adds Jason Richards, Partner at Stos Partners.
“San Diego continues to be recognized as one of North America’s largest life sciences markets,” says Richards. “The growing demand and limited supply of buildings constructed for this use has driven developers to search for opportunities beyond traditional life sciences submarkets, where they can convert industrial properties into lab space. This leaves even less industrial product in the market to acquire and assets like this one increasingly valuable.”
The San Diego property offers the buyer attractive features such as flexible industrial space totaling 55,500 square feet, ample parking space, drive-around access, dock-high loading space, storage space, and a security system with a fenced-in lot. The building is located at 9431 Dowdy Drive in the heart of the Miramar submarket with excellent proximity to interstates 805 and 15 to facilitate transportation needs.
Bryce Aberg, Brant Aberg and Zachary Hardman from Cushman & Wakefield represented Stos Partners as the seller in the transaction.
About Stos Partners
Stos Partners is a privately held commercial real estate investment and management firm that invests in real estate directly and in partnership with high net worth and institutional investors. With a track record spanning over $1.4 billion in transactions to date, the firm targets the most competitive risk-adjusted returns in the marketplace through value-add acquisitions and strategic repositioning of industrial and multifamily assets of both institutional and small-to-mid-cap commercial properties.
Headquartered in San Diego, California with an office in Orange County, California and Laredo, Texas, Stos Partners’ local expertise and longstanding relationships translate into the ability to source, fund and close transactions quickly and profitably.
About Long Wharf Capital LLC
Long Wharf Capital LLC is a Boston-based private equity real estate manager focused exclusively on value-added investments in the U.S. Formed in 2011, the firm invests on behalf of institutional clients including pension funds, endowments, foundations, and family offices. Long Wharf’s investment approach utilizes multiple value creation strategies to target opportunities across property sectors and U.S. markets. Since Long Wharf’s first fund in 2012, the team has invested over $1.1 billion of equity in more than 65 investments across the U.S. with an aggregated gross cost of $3.6 billion.
