SAN DIEGO—Premier Realty Holdings has acquired Wateridge Pavilion from Fenway Properties for $16.3 million after generating interest from a wide variety of buyers due to its Sorrento Mesa location. The property, located at 10525 Vista Sorrento Pkwy., is a three-story, 62,427-square-foot office building that was 97% leased at the time of sale.

Louay Alsadek and Hunter Rowe of CBRE and Brett Ward, Michael Cassolato and Michael Mahoney of Cushman & Wakefield handled the transaction on behalf of the seller and buyer. According to Alsadek, “Wateridge Pavilion generated significant interest from a wide variety of buyers due to its location, historically high occupancy and the quality of Fenway's recent capital improvements.” Fenway owns, leases and professionally manages commercial real estate and developable land throughout Southern California and the Phoenix metropolitan area. The company is actively expanding its investment footprint to include other primary markets within the Western US. San Diego-based Premier is a private investment firm led by Marc Barmazel that plans to occupy space at Wateridge Pavilion.

Barmazel tells GlobeSt.com his plans for the property are to maintain it and do a few more upgrades. “The past owner did some pretty nice upgrades. I will be putting in a couple of different businesses there and will be occupying about 10,000 square feet when it becomes available. Other than that, I have a long-term-hold philosophy on the property.”

Sorrento Mesa is one of the most popular San Diego office submarkets. Generally more affordable than nearby Del Mar Heights, one of the most expensive submarkets in the county, San Diego also benefits from the overall appeal of San Diego for office users, which is that it is more affordable than many of its neighboring markets. As JLL SVP Tim Olson told GlobeSt.com in July, the San Diego market doesn't have as large a corporate sphere as Silicon Valley, L.A. or OC, which means demand is lower, keeping office rental rates down; but there are also untapped opportunities for office tenants here, with San Diego office rents the lowest among key California markets.

The firm found that San Diego's low rental rates enable companies to have direct access to a highly talented and educated labor pool in San Diego while saving on real estate costs. The San Diego nonfarm employment base has grown 15.8% since 2010 to 1,436,400. The expanding economy provides a strong foundation for job growth from a diverse set of industries, including tech, life sciences and business services. As companies get priced out of more expensive markets, they can turn to San Diego and its growing economy and high quality of life.

Instant Insights /

Submarket Brings Buyers to This Office Asset

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