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As part of an ongoing strategy to increase its commercial real estate holdings in San Diego, Harsch Investment Properties of Portland, OR has picked up the 106,791-sf industrial park known as Kearny Mesa Business Center in a deal worth $10.8 million. The purchase marks Harsch’s second acquisition in the Kearny Mesa submarket of San Diego, as the privately held real estate company also owns Cabrillo Commerce Center, which is located just across the freeway from Harsch’s newest asset. Harsch is interested in the Kearny Mesa area because it is the “best submarket” for smaller bay tenants, according to Bill Rodewald, a Harsch vice president based in San Diego. It is the ideal geographical location “if your business requires you to deliver products and have clients visit you because of the confluence of freeways here,” Rodewald tells GlobeSt.com. The firm has already enjoyed considerable success in maintaining Cabrillo Commerce Center leased and is hoping to repeat this performance with Kearny Mesa Business Center. “It has lots of potential for synergy with the other parks that we own in Kearny Mesa and Miramar,” Rodewald points out. Although the four-building industrial park is currently 95% occupied by tenants such as Kodak subsidiary Qualex Photoprocessing, ISEC Inc., and United Windows and Exteriors, a number of leases at Kearny Mesa Business Center are due to expire in the upcoming months. Harsch is poised to take advantage of this occurrence and reposition the property as a multi-tenant asset that caters to smaller industrial users. The park was “originally built as a small, multi-tenant, flex-space project,” Harsch president Jordan Schnitzer tells GlobeSt.com. As sometimes happens with these types of properties, however, tenants began to expand and as a result, space was eventually shifted out of balance, Schnitzer explains. He says his firm plans to break up some of the larger spaces as leases turn over and “give them back to smaller bay tenants.” As Schnitzer tells GlobeSt.com, “it is a lot more work than a single check from a big-box tenant, but we get more satisfaction from working with smaller users.” Harsch has acquired Kearny Mesa Business Center, which stands on a 6.23-acre parcel on Kearny Villa Road, from American Assets Inc. Bill Cavanagh, Louay Alsadek and Brad Tecca of Grubb & Ellis/BRE Commercial acted on behalf of both buyer and seller in the recent transaction.

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