SAN DIEGO—Expanding its San Diego footprint and adding nearly 300,000 square feet to its portfolio, Parallel Capital Partners, Inc. has acquired a three-building class A office complex in Sorrento Mesa for $72.5 million.
Parallel purchased the project, known as Wateridge Plaza, in a joint venture with Equity Group Investments, a Chicago-based private investment firm founded by famed entrepreneur Sam Zell, from a partnership of Beacon Capital Partners and C-III Realty. The broker for the seller was Adam Edwards, Eastdil Secured.
Constructed in 1984, the office campus—located at 10201, 10221 and 10241 Wateridge Circle—consists of three five- and six-story buildings totaling 278,787 square feet, as well as a parking complex. The eight-acre project includes future development potential of approximately 168,000 additional square feet of Class A office space. The complex, which was renovated in 2012, includes a cascading courtyard waterfall, full-service bistro, fitness center with lockers and steam room, structured parking and access to volleyball and tennis courts, barbecues and hiking trails. American Specialty Health and Eddy M’s Bistro are among the tenants of the complex, which currently has an occupancy rate of 72%.
According to Matt Root, CEO of San Diego-based Parallel Capital Partners, this latest acquisition significantly furthers the firm’s core mission of acquiring irreplaceable, value-added commercial real estate in key Western markets. “Wateridge Plaza is the ideal address for companies seeking the highest profile location, unparalleled campus amenities, panoramic canyon views and superb freeway access. Most importantly it expands our presence in the Sorrento Mesa area, a technology and life science corridor which we believe is an emerging hub of the San Diego office sector,” Root said. “Home to global leaders such as Qualcomm, Carefusion, & NuVasive, Sorrento Mesa is rapidly evolving into a world-class life science and high tech cluster.”
The prior owners, Beacon and C-III, invested over $14 million in upgrades to the project from 2009 to 2013. Parallel will augment these investments with additional capital improvements to further enhance the institutional quality of the asset. Parallel has retained architectural firm Gensler and Glanz Signing & Graphics to collaborate and implement the additional improvements.
The principals of Parallel Capital Partners – Matt Root, Jim Ingebritsen and Jim Reynolds – have a successful history in the Sorrento Mesa market, and in 2002 acquired Seaview Corporate Center for $65 million which they sold to Principal Financial Group in 2004 for $92.1 million. They re-acquired that property at the height of the credit crisis in 2009 from Principal Financial Group for $75 million and sold it to John Hancock Real Estate in 2011 for $109 million.
Parallel added more than $400 million in commercial real estate to its portfolio last year, with key purchases in Dallas and Orange County. With this latest acquisition, Parallel now owns 13 office, industrial and R&D properties in the San Diego area, with more than 748,853 square feet concentrated in Sorrento Mesa/Sorrento Valley market, including Sorrento Pines Business Park, Sorrento Business Complex and Sorrento Research and Development Park.