How Mortgage Bankers Are Meeting Value-Add Demand

Rutenberg: “It’s ultimately our individualized approach and ability to recognize these unique attributes that play a role in the success of structuring these types of deals.”

SAN DIEGO—The San Diego market will continue to see strong demand for creative co-working office and flex/R&D spaces, as well as increased investment in class-B and -C office assets well into next year, Continental Funding Group’s director Eugene Rutenberg tells GlobeSt.com. Rutenberg recently secured $7 million in bridge financing for a 25,000-square-foot value-add office building in the financial district of Downtown San Diego, which he says is “in the midst of a resurgence. Fueled by tremendous growth in the tech and financial service industries, the central business district is truly the corporate epicenter and financial capital of San Diego, with the largest concentration of high-rise office buildings and jobs in the county. Based on the enormous job growth and innovation in this district, demand for quality office space is on the rise, placing upward pressure on lease rates in this submarket.”

According to a recent CoStar report, Downtown San Diego’s office market commanded average rental rates of $29.15 per square foot in Q2, with value-add class-B and -C product seeing the most positive net absorption, indicating strong tenant demand for office space. We spoke exclusively with Rutenberg about trends in the office sector and how mortgage bankers are helping to finance these types of deals.