Urban West Medical Project Finishes 90% Sold

Urban West describes the development as the only medical office condo project in South Carlsbad offering ownership versus leasing. The 90% sales figure, with only one units remaining, "has outperformed the San Diego market," observes David DiRienzo, president of Urban West.

DiRienzo attributes the success to a combination of the building design, its location fronting El Camino Real adjacent to the new Tri-City Wellness Center, and a pent-up demand for medical space in South Carlsbad. He notes that the Carlsbad medical office market has an 8% vacancy and has no new projects under construction. Carlsbad medical office buildings have commanded the highest sale and lease values in the county, with units selling in the range of $500 per square foot and lease rates at $3.30 to 3.45 per square foot per month, triple-net.

Aric Starck of Grubb & Ellis|BRE Commercial, who is marketing the project for Urban West, points out that with real estate prices down, interest rates at their lowest level in seven years and tenant improvement costs 25% lower than a year ago, "It's a perfect storm for potential buyers."

Starck says that financing on owner-user deals is very obtainable, with most buyers utilizing SBA loans due to their high leverage, low rates and low inception fees. The stimulus package passed in March eliminated lender and borrower fees of approximately 2%, he points out.