30,000-SF Signature Office Suites Fetches $292 Per SF in Cash

Eric Wichterman with Grubb & Ellis/BRE Commercial LLC says the final price for the 8585 E. Hartford Dr. property was matched only one other time, the $300-per-sf trade of the Mammoth Professional Building along 87th Street in Northsight. The 92%-leased Signature Office Suites, developed in 2000 on a 2.13-acre tract in Perimeter Business Center, is commanding rents circling $35 per sf.

Wichterman tells GlobeSt.com that the trust, overseen by Wells Fargo in San Diego, wasn't the highest offer in a 60-day marketing period. "We went with it because it was an all-cash offer," he explains.

The 40-tenant building's lease rollover presented a problem for some buyers despite the design and location, according to Wichterman. Tenant spaces range from 650 sf to 1,500 sf, with nearly half of the leases rolling during the coming year, he says. But it's the ability to deliver that office size that generates the "extremely high rents," he explains. "There are just not a lot of small spaces in that submarket."

Wichterman says the design also contributed to the price. Each suite has a kitchen, balcony, bathroom and wood floors. "It's one-of-a-kind space," he stresses.

Wichterman teamed with Stan Shafer, Jeff Wentworth and Blake Hastings, all with Grubb & Ellis/BRE Commercial, to represent the local seller of record, Signature Office Suites LLC, the building's developer. Barry Hendler with Grubb & Ellis/BRE Commercial in San Diego bargained the buy side. Gail Luban with Cityblock Suites in Scottsdale was hired to lease and manage the property.