Will Redevelopment Help Increase the Industrial Supply?

San Diego investors are looking for ways to boost the tight industrial supply in the market, but with limited land available for new development, options are limited. BLT Enterprises, however, recently brought high quality industrial product to market with the redevelopment of an office property into flex-industrial. The project was redeveloped with flexibility in mind to attract a range of small-box industrial users, from R&D companies to warehouse space.

“The had good bones and a single-tenant feel with its own yard and its own real estate around the building,” Bernard Huberman, founder and president of BLT Enterprises, tells GlobeSt.com. “It was originally built as a two-story industrial building, and in the 1980s, someone filled in the mezzanine and converted it to office. It was really under parked for the market as office. We brought it back to its original square footage to create an R&D flex industrial building, and it really suites a wide range of the market.”

In addition to the initial investment, the firm spent $2.5 million to return the property to its original industrial format before renovating the exterior areas. In total, the finished property has3 38,000 square feet of office space and 16,000 square feet of two-story industrial product that could be used for a warehouse or lab space. “This was a large capital investment for the real estate and to bring it back to the original feel. We also redid the exterior, installing a new glass line, moving the entrance to the side of the building with a great lobby area,” says Huberman. “The quality of the building is amazing. It has 12-foot ceilings in the office and 24-foot ceilings in the warehouse. This property has a unique blend of office and warehouse, and it is really a unique opportunity for the market.”

While redevelopment projects like this do help to boost the square footage, Huberman says that even these opportunities are limited. “There is a limited supply of land in the area, so you have to go in an tear something down or you are retrofitting,” he says. “This project had the bones for retrofitting. There are some properties, but there isn’t a lot of available land in the area. There is very little on the market for sale.”

Despite the challenges, the demand for industrial product makes him bullish on the market, and he is constantly looked for opportunities, either for new construction or redevelopment. In fact, the firm has a new 65,000-square-foot industrial property with 30-foot clear heights under construction that will deliver in August. “I am constantly looking for available properties,” says Huberman. “Kearny Mesa has a unique blend of owner-users, and the turnover rate is low, so we like the North County area because we have access to major freeways, and it is 20 minutes to down town. . We are bullish on the San Diego market, and we are going to continue.”