SAN DIEGO—SR Commercial has acquired two commercial assets encompassing nearly 300,000 square feet and totaling over $51 million of total capitalization in San Diego County. The company's recent acquisitions include a 235,472 square-foot portfolio of office, industrial and retail product in Miramar, CA, and a 62,814 square-foot industrial/flex project in San Diego, according to Adam Robinson, a principal at SR Commercial.

“Competition continues to climb for high-quality investment product in San Diego County,” explains Robinson, who founded SR Commercial along with partner CJ Stos. “Limited opportunities combined with strong tenant demand is beginning to drive rental rates upward in both office and industrial markets.  The result is that investment properties on the market today are poised to deliver deep value to those investors who are able to secure product.”

Robinson notes that SR Commercial has acquired over a million square feet of investment product in the past 24 months, and plans to continue to invest in large properties and portfolios throughout San Diego, Orange County, Los Angeles, and the Inland Empire.

SR Commercial's two most recent acquisitions include:

Acquisition 1: Mark II Portfolio in Miramar

SR Commercial acquired the Mark II Portfolio, a 235,472 square foot, high-quality portfolio of office, industrial and retail product in Miramar. for $40 million fully capitalized. The portfolio, which encompasses nearly 15 acres of land, is located near the intersection of Interstate 15 and Miramar Road and consists of eight single and multi-tenant industrial buildings, five multi-tenant office buildings, and one retail/showroom building that is currently fully occupied by 24 Hour Fitness.

 “This portfolio represented a rare opportunity to acquire a critical mass of real estate in San Diego County, within a submarket that is increasingly demonstrating its strength in tenant demand,” explains CJ Stos, a Principal and Co-Founder of SR Commercial. 

SR Commercial's primary strategy for this investment property, which was 94.4% occupied at the time of purchase, is to increase rents across the portfolio to meet today's market rate.

“Current tenant lease expirations will occur on a staggered schedule, providing the flexibility to lease space over the next three years,” explains Stos.  “This gives us the ability to capitalize on increasing tenant demand in the Miramar submarket, and to increase value through strategic rent increases.”

On the five office assets, SR Commercial plans to make minor external improvements, including new exterior paint, roofing, HVAC repairs and landscape upgrades.

“We plan to hold the office assets on a short-term basis and sell the five buildings separately or together within a one to five year period,” notes Stos.

Alternatively, SR Commercial plans to hold the eight industrial assets on a long-term basis as a cash flow investment. The company will replace old roofs and HVAC units, update the landscaping and facades, and repair the parking lots upon tenant rollover as needed.

SR Commercial and the seller, TA Realty Associates, were both represented by Brad Tecca, Rick Reeder, Bryce Aberg, and Brant Aberg of Cassidy Turley in the acquisition.

Acquisition 2: Morena Business Center in San Diego

SR Commercial also recently acquired the Morena Business Center, a 62,814 square-foot industrial property in San Diego for $11 million fully capitalized.

The property was 74% occupied when acquired.

SR Commercial plans to renovate the vacant units, creating a more modern build-out with polished concrete floors and exposed ceilings. Additional improvements to the project will include new exterior paint, awnings, and signage, as well as updated landscaping. 

“We are experienced in transforming industrial product into more creative spaces that are aligned with the demands of today's tenants,” explains Stos, who notes that SR Commercial has completed similar renovations in more than seven other investment properties over the past 24 months.  “Based on the asset's excellent location and these modern renovations, we will have the opportunity to create deep value in this property that will support a long-term hold.”

SR Commercial and the seller, a family trust, were both represented in the deal by Bryce Aberg, Brant Aberg, and Brad Tecca of Cassidy Turley.

The Morena Business Center is located at 2620, 2640 and 2645 Financial Court in San Diego.

SR Commercial is a privately held, full-service commercial real estate investment company, which acquires, owns and develops income-producing industrial and office properties.  The firm's two Principals include Adam S. Robinson, CPM, CCIM, SIOR, and CJ Stos, MRED.

As an active commercial real estate operator with a well-established reputation as a value-added investor, SR Commercial focuses on real estate opportunities that are inefficiently priced due to a variety of circumstances. These include vacancies, rollover risk, sub-optimal management, inefficient current use, deferred maintenance, long-term undervalued leases or other unfavorable property and market conditions.

With its corporate office in San Diego and the Principals' close ties to Orange County and Los Angeles County, SR Commercial has positioned itself to become one of the leading real estate investment companies in its respective markets.  In addition to owned real estate, the firm provides third-party management for more 5 million square feet of industrial, office, and retail properties