JLL Income Property Trust has acquired South San Diego Distribution Center for $158.5 million from an affiliate of the Murphy Development Company. The three-building property totals 665,000 square feet, and it is 96% leased to eight tenants.

JLL purchased the property with the assumption of an in-place, $72.5 million first mortgage at 3.18% fixed-rate. The mortgage is interest only for another four years with a maturity in 2031. In addition, JLL issued $75 million in Operating Partnership units to the sellers. The remainder of the purchase was funded with cash on hand.

JLL was attracted to the property due to the strong industrial dynamics in San Diego, which has nearly 200 million square feet of industrial product and limited ability to build more due to geographic barriers. According to JLL, the market has a 3% vacancy rate. The South San Diego Distribution Center is located in Otay Mesa about 1.5 miles from the US-Mexico border and the Otay Mesa Port of Entry, the most active truck border in the California and the second most active in the US.