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SAN DIEGO-Falcon Real Estate Investment Co. has acquired the 96,581-sf University Pacific Centre office building for $42 million on behalf of an overseas-based 1031 exchange buyer. The seller of the property, which is a four-story class A building at 8899 University Center Lane in the University Towne Center submarket, was Alecta Real Estate USA LLC of San Francisco.

Falcon, based in New York City, is an advisory and management services firm representing non-US individual and institutional investors in US real estate. Falcon, which maintains a regional office in San Diego and will be the asset manager of the property, purchased the University Pacific Centre on behalf of GEM University Pacific LLC.

Falcon executive vice president Scott Sweeney, who is based in San Diego, cites the University Pacific Centre’s “premier location within the prestigious UTC office submarket, with frontage on Interstate 5.” He notes that the office building provides freeway-visible building signage and the most generous parking ratio in the UTC submarket, four spaces per 1,000 sf of office area.

University Pacific Centre is 87% leased to a wide range of tenants including Pharmaceutical Research Associates, EpiCept Corp. and the Merrill Corp. “Falcon views this property as a secure long-term hold,” Sweeney comments.

Sweeney says that Falcon’s business plan calls for addressing the existing vacancies and also reviewing upcoming lease expirations as an opportunity to increase cash flow by bringing below-market rental rates to market levels. Plans also call for upgrading some of the systems in the building, which was constructed in 1987, and additional improvements to increase occupancy and maintain the building’s status as a high-end office property.

Sweeney adds that Falcon sought out University Pacific Centre because of its easy freeway access and strategic location. The property is across the street from the 419-room Hyatt Regency Hotel of La Jolla, the Sporting Club fitness center and several high-end restaurants. The University of California at San Diego is across Interstate 5 from University Pacific Centre, and San Diego International Airport is approximately 15 to 20 minutes from the building, as is Downtown San Diego.

Falcon represented the buyer in the acquisition. The seller was represented by Adam Edwards, Daniel Broderick and Rick Stumm of Eastdil Secured.

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