SAN DIEGO—The recent sale of Downtown San Diego's Santa Fe Depot opens up add-on uses for the property, including a boutique hotel, creative office, restaurants and retail, Voit Real Estate Services' Kipp Gstettenbauer tells GlobeSt.com. As we recently reported, Gstettenbauer and Ryan King of the firm's private client group recently represented seller Prologis Inc. in the first-ever sale of the historic building to Santa Fe Depot LLC. The building is a local landmark located at 1050 Kettner Blvd. and built in 1915, and it has been home to Amtrak's San Diego Union Station since 1920.

We spoke with Gstettenbauer about the transaction and the challenges of selling historic properties and preserving their value while keeping them modern and fresh.

GlobeSt.com: What was interesting or unique about the transaction process for this property?

Gstettenbauer: This was an exceptionally rare property and a tremendous value offering. Santa Fe Depot serves as Union Station in San Diego, with Amtrak as its primary tenant since 1920. Prologis owned this property for a long time through its Catellus subsidiary. They recognized that it was time to sell, and they brought the asset to Voit based on our long-term relationship.

The property was highly sought after. Investors such as Warren Buffet's company, BNSF Railway Co., which runs on tracks 5 and 6 at the station, made some inquiries about buying it, and there was strong interest from several other potential buyers globally.

The station's location also contributes to its rarity: the asset encompasses an entire city block in Downtown San Diego, and there are many compelling projects surrounding it. In truth, this is a diamond in the rough with tremendous potential based on its historic designation and irreplaceable location.

Our firm specializes in unique transactions like these—specifically, Voit's private-client group has a niche for selling rare properties such as post offices, fire stations and cool, old historic buildings. We will also be staying on to manage the asset in partnership with Heritage Architects and the San Diego Historical Building Society.

GlobeSt.com: What is challenging about the sale of historic properties?

Gstettenbauer: Historic properties can be challenging for inexperienced buyers and managers. Fortunately, because our private-client group specializes in rare and historic properties, we understand what needs to be done to ensure that the asset always preserves its historic heritage, while also building value for the buyer.

To accomplish that, we retained David Marshall from Heritage Architects, who is also from the San Diego Historical Building Society and oversaw a police-station remodel about four years ago. He knows exactly what to do, what can and can't be done. There will be opportunities for a new boutique hotel on the building's second floor, as well as creative office and retail uses, but all will be done while adhering closely to the intrinsic value of the property, and to the guidelines set forth by the San Diego Historic Board.

GlobeSt.com: How do preserve the historic value of a property while keeping it modern and fresh?

Gstettenbauer: Voit will work very closely with David Marshall to accomplish this. That said, I want to be clear that even as we analyze potential opportunities, this property will always be home to Amtrak. The intent is to redesign the real estate to boost ridership share on Amtrak and get more people to ride the rail line.

GlobeSt.com: What uses work best in historic properties, and which should not be tried?

Gstettenbauer: For this project, we anticipate that we will be able to add retail on the ground floor—this gives us the opportunity to restore the property to its truly original historical intent, which is to create a hub for Amtrak riders where they can also interact with local businesses and services.

The challenge is to bring in the right retailers, so we're talking to marketplace operators of places like Liberty Station in Point Loma, Pike Place Market in Seattle, and Grand Central Market in L.A. to garner best practices in attracting the best of the best tenants in spaces like these. Ultimately, we want to have a beautifully and correctly preserved property that also attracts people to ride the train and reignites the area for future high-rise projects.

In the future, the ownership envisions bringing back the old days, when a passenger and his or her significant other would go to the train station dressed for an evening out, take the train to Los Angeles or Orange County to see a concert or show, and then enjoy a pleasant train ride home.

We spoke with Gstettenbauer about the transaction and the challenges of selling historic properties and preserving their value while keeping them modern and fresh.

GlobeSt.com: What was interesting or unique about the transaction process for this property?

GlobeSt.com: What is challenging about the sale of historic properties?

GlobeSt.com: How do preserve the historic value of a property while keeping it modern and fresh?

GlobeSt.com: What uses work best in historic properties, and which should not be tried?

Instant Insights /

Historic Depot Sale Presents Unique Development Opp

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