COMMERCIAL PROPERTIES
Plaza 56 is a perfect example of the advantage that local
knowledge provides. Due to our involvement with the local Community Planning
Groups, we were familiar with the planned route for the then future SR56
Freeway, a long delayed link between the I5 and I15 Freeways. Once the preferred
route was established we identified every property along this future freeway
and regularly contacted those owners who were not planning to build out
their properties. One property owner, impressed with our perseverance, eventually
offered his property to us at a set sales price with a very quick 30 day
due diligence period. Due to our local knowledge, this limited time was
sufficient and we were able to complete a review of the property, including
market and governmental regulations, and then commit a non-refundable deposit
on our contract within the time specified.
Upon acquiring the land, we then changed the goal of the entitlement
process already underway on the property, which up until that time was being
subdivided into 1 acre parcels with potential plans for one and two story
industrial and R&D buildings, a small retail center, gas station and
a 150 room hotel. Instead we fine tuned the application and began processing
a plan for Class A three to five story office, biotech and medical buildings
in a Campus style setting. What was ultimately approved is a Campus style
office complex consisting of anywhere from between 500,000 sqft up to as
much as 800,000 sqft, depending on the users within the complex. The zoned
property also allows for a gas station and hotel, in lieu of some of the
office, but we are unlikely to build these. Current plans are to incorporate
the retail into the ground floor of our office buildings and not to build
the hotel or gas station, but to rather maximize the amount of office buildings.
The site is midway between the I5 and I15, on the SR56. Most
importantly its location enables its future tenant’s to access the
property from all directions along surface streets, avoiding freeway commutes.
It also can appeal to employees from both coastal or inland commutes, while
allowing senior management easy access from San Diego’s high end Rancho
Santa Fe neighborhood just minutes away.
The property is currently graded. The SR56 Freeway will be
completed by October 2004. All surface streets are completed and the site
is now 100% accessible.
Date Of Acquisition: September 2000
Size: 25 acres Gross
Date all Entitlements Obtained: July 2002
Site Development Commenced: April 2003
Start of Building Construction: N/A
Financing: Equity
Another area of focused investigation in 1998/9 was the SR76
Freeway in Oceanside in northern San Diego County. This freeway was also
relatively new, having only been completed in 1998. We contacted many owners
of undeveloped property along this route and were successful in being able
to obtain an option to purchase one 10-acre parcel situated next to the
freeway. After this success we were able to consolidate this opportunity
by obtaining similar options from 3 other owners whose adjoining parcels
created a 25-acre site bordered on all sides by the freeway and two major
local roads.
We then successfully convinced the City of Oceanside that
the current zoning for this property, which allowed for a small pedestrian
oriented retail center, was inappropriate due to its proximity to the freeway,
and we successfully processed a new zone for the property, which allowed
us to build a 265,000-sqft freeway, oriented retail center on this property.
During this process we were able to enter into an agreement with Lowes Home
Improvement Centers to join forces with us and to purchase half the property
from us, and also to share the development risk and costs to complete all
on and offsite improvements. Construction of all off and on site improvements
were completed in mid-2002 and Lowe's opened their store in October 2002.
Other tenants at this time include a McDonalds and Shell co-brand,
which opened in April 2003. Tenants in negotiation at May 2003 include Ralphs,
San Diego National Bank, and numerous smaller tenants for inline shop space.
Date Of Acquisition: April 2001 – (First
Optioned in December 1999)
Size: 25 acres Gross
Date all Entitlements Obtained: December 2000
Site Development Commenced: August 2001
Site Development Completed: July 2002
Lowe's Opened: October 2002
McDonalds Opened: April 2003
Financing: La Jolla Bank
During our involvement as a volunteer development manager
during the entitlement and construction of the San Diego Jewish Academy,
we became familiar with all of the neighboring properties and in many cases
met and negotiated for access easements etc with them. After completion
of the school, a neighboring property was put up for sale. As we were aware
of the entitlement and physical constraints we were successful in negotiating
a purchase price and acquired the property plus an adjoining property to
create one parcel. In may ways this was a risky acquisition as the property
is zoned for residential uses an we have submitted a zoning application
which will allow us to build commercial office buildings.
We have been through a long entitlement process with the City
and Community Planning Group, and as of May 2003 are comfortable that we
will be successful in this endeavor. We hope to complete the entitlement
process by the end of 2003 and hope to get the right to build up to 150,000
sqft of office space on the property for medical, corporate office as well
as technology and biotech users. The property is extremely well located
with freeway visibility at a freeway intersection and is located in the
middle of Carmel Valley, San Diego’s premier office location.
Date Of Acquisition: April 2001 and August
2001
Size: 5.5 acres gross, 4.5 net
Date all Entitlements Obtained: December 2003 - goal
Site Development Commenced: Unknown
Start of Building Construction: Unknown
Financing: Equity
This property was a 40-year-old industrial building that had
been added to at various times during its existence. The end result was
a maze of office and industrial spaces which made it difficult to lease.
The opportunity we identified, was to create numerous separate tenant suites
by installing new exterior entries taking advantage of the fact that existing
bathrooms were located throughout the building. The end result was that
we turned what had been a primarily single tenant structure into a multi-tenant
facility with separate entries for approximately 10 tenants. The project
was reasonably quickly leased up and remained significantly leased throughout
our time of ownership.
Date Of Acquisition: February 1998
Building Size: Approximately 50,000 sqft
Renovation Commenced: Immediately
Project Sold: July 2002
Financing: Pacific Crest Bank
Copyright
2003
Sea Breeze Properties
