written by
Rocco Cortese

Intersection Diversified Value Fund sold Carlsbad office property, La Place to a local investor

Located at 5900-5950 La Place Court, Carlsbad, CA 92008, this two-building multi-tenant class ‘A’ office campus consists of 81,965 SF within the Carlsbad Research Center.

Brokers Henry Zahner, Steven Jacobson, and Steve Gildred of Intersection, quietly marketed the property for sale in the first quarter of 2022 as an unpriced off-market life science conversion opportunity. After multiple competing offers were received, the buyer Chesnut Properties (Diego I Investment Company, LLC) was selected based on their strong local reputation and future plans for the campus. Strong acquisition interest from a variety of buyers was based on the desire to invest in the future of the Carlsbad market.

La Place was originally acquired by Intersection Diversified Value Fund as a Class ‘A’ stabilized office campus in February 2020. During the holding period, conditions for the office, R&D, and industrial markets across the globe changed largely due to the COVID-19 pandemic. This created a decrease in demand for general office space and an increase in demand for R&D/industrial space. The La Place Court campus represents a versatile product type that continues to be attractive and functional for a variety of uses, including life science.

“There is currently a shortage of life science space in the Carlsbad market where demand and conversion of existing product is anticipated to continue”, says Henry Zahner, Senior Director with Intersection.

Senior Associate Steve Jacobson explains that the Carlsbad submarket and the area immediately surrounding the property are slated to be a premier life science hub. Surrounding properties have either sold for the purpose of life science conversion, are being marketed, or will provide supporting general office space for technology-oriented companies.

“We created a win for both the buyer and seller in this transaction”, says Steve Jacobson

The sale of La Place Court Campus represents the largest transaction for the Intersection Diversified Value Fund, led by Managing Directors Rocco Cortese and Mark Hoekstra.

“The decision to sell the property was tied to our strategy for this project and momentum in the market” shared Rocco Cortese “We have a similar project in Sorrento Mesa that we are also considering for a life science conversion”.

To learn more about this deal please reach out to Rocco Cortese at rcortese@intersectioncre.com or Henry Zahner at Hzahner@intersectioncre.com

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

written by
Dan McCarthy

Rancho Las Palmas will Relocate from Escondido to an Intersection Owned Retail Center in San Marcos

Established Escondido Restaurant Rancho Las Palmas, has made the decision to relocate and executed a 10-year deal at San Marcos Square located at 160 S. Rancho Santa Fe Rd in San Marcos. Brokers Dan McCarthy and Alec Spencer facilitated the deal, leasing the entire 3,400 SF prime end-cap. Rancho Las Palmas will not only have premier visibility from the window-lined suite but ample parking, with entry accessible from both Rancho Santa Fe Road and Grand Avenue.

Offering authentic coastal-Mexican cuisine with traditional dishes like agua chile and ceviche, Rancho Las Palmas is excited to begin the build-out process for their new space. With plans for a kitchen, bar, indoor and outdoor seating options, and private event space. The restauranteur is excited to elevate their previous location with a bright and colorful design and an open concept dining space.

As an internally owned property under Intersection Investment Management, San Marcos Square is a redeveloped retail center with a strong and harmonious tenant mix of both celebrated local tenants and national credit users like Sunnyside Learning Center and US Bank.

With an anticipated opening of January 2023, Rancho Las Palmas will not only increase the center’s overall foot traffic but will undoubtedly complement the surrounding community. This new lease is the last important step in the value-add program that Intersection set out to achieve with the center.

“We’re Thrilled to have found a tenant with such a great history in San Diego to relocate to our Center”, says Mark Hoekstra, Managing Director with Intersection. “Rancho Las Palmas will become a place for locals in the area to meet and enjoy great food” 

 

To learn more about this deal please reach out to Dan McCarthy at dmccarthy@intersectioncre.com or Alec Spencer at aspencer@intersectioncre.com

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

written by
Rocco Cortese

Intersection Investment Management Acquires Industrial / Flex property in Gilbert, Arizona

Intersection Investment Management is pleased to announce it has acquired a 92,750 square foot multi-tenant flex industrial property in Gilbert, Arizona. Representing brokers, David Bean and Cory Sposi of Commercial Properties Inc., completed this off-market deal bringing the second acquisition in Intersection’s post-pandemic industrial investment strategy. The strategy focuses on $5-$20M projects in markets west of Denver based on post-covid market trend forecasting. The investment was syndicated to a group of Intersection’s high net worth investors. It is the company’s 8th acquisition in total and the fund now has surpassed over $100M in historical deal transaction volume. Anton Myskiw, Intersection Senior Analyst and Phoenix native who sourced the deal says,

“Given the competitive nature of the market for this kind of product, we have to recognize the great work done by our brokerage team at Commercial Properties. They have worked collaboratively with us for months in the Phoenix Metro area and helped us find a great deal off market.”

The Sellers, Golden Key Industrial Park LLC. who previously held and managed the property as private investors, focused upon occupancy rather than driving rental rates. This resulted in an opportunity to hold rents at market while completing significant improvements at the property. This will allow Intersection to focus on tenant experience and make improvements that will improve curb appeal and value-add. Planned renovations include new paint, parking lot resurfacing, landscape upgrades, and, new tenant signage to provide greater visibility. Rocco Cortese, Managing Director with Intersection confirms,

“Multi-tenant flex with a value-add component represents a very good risk profile for our investors. The Southeast Phoenix market has great fundamentals and we can see a clear path to demand for high quality product like KeyWest Plaza. Fundamentally, that is what we set out to do on every deal”

Intersection envisions and intends to create a best-in-class flex industrial asset to meet the demands of the accelerated growth in the Gilbert market. Commercial Properties LLC. will continue to manage and lease the property on behalf of Intersection. David Bean, who represented the seller as broker for Commercial Properties, Inc. notes,

“Intersection is relatively new to this market, but quickly understood where the growth opportunities could be found. We look forward to working with them as they execute the strategy on this property.”

To learn more about this deal please reach out to Rocco Cortese at rcortese@intersectioncre.com or Anton Myskiw at amyskiw@intersectioncre.com

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

written by
Kyle Clark

Prominent four-building retail center has been sold in an off-market deal

Senior Director Kyle Clark represented the seller of a prominent retail center in the Sports Arena district in San Diego, the Four-Building property located at 3146-3194 Midway Drive, San Diego CA, 92110 closed earlier the last week of April.

At the time of sale, the property was 95% leased to an array of both local and national tenants, including Taco Bell, Epic Wings, Kyoto Sushi, and Tandoori House. Additionally, National credit tenant Popeye’s Chicken will be opening in the center this Summer operating out of the corner unit that

The purchase was structured to accommodate the amicable dissolution of a business partnership between the two sellers’ families.

“This was an opportunity for our clients to sell the property to settle a jointly owned and operated business they ran for decades but have recently sold in Central California.” -Kyle Clark

The off-market deal was transacted through the outreach of interest through the purchasers. The buyers look forward to continuing operating the property as it has been while anticipating the eventual redevelopment of the Sports Arena site, the former post office headquarters, and the surrounding area which is believed to bring new life to the area.

 

To learn more about this deal please reach out to Kyle Clark at kclark@intersectioncre.com

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

written by
Alec Spencer

“Why do I need a Tenant Rep Broker?”

Commercial Tenants will often sign leases without a broker- unfortunately, it’s unlikely those tenants get the best deal. Having a broker advocate for your terms is crucial. 

Commercial landlords have goals for their property and above all, they want maximum returns and higher rent. Property owners typically hire listing brokers who handle the day-to-day leasing activity and get compensated in the form of a commission after the deal is executed. When a tenant searches for commercial space on their own, it is important to remember the lessor broker has a fiduciary duty to the property owner, not you the tenant.

Maybe the most common industry misconception is a tenant operating without broker representation will save the landlord money by eliminating one side of a commission. While that may be true, listing agents are far savvier than that. What actually happens when a tenant is unrepresented, is the listing agent ends up receiving a larger commission for less work on their part as listing agreements typically provide full market commission regardless of whether or not the tenant has a broker.

 

“So where is the value in hiring a real estate professional for Tenant Representation?”

 

Maybe the most valuable is by saving the tenant time and energy. As a business owner, you don’t always have time to search available properties, schedule tours, contact listing brokers, or negotiate rates and terms. An experienced and driven Tenant Rep Broker is there to handle all the busy work so you can focus on your expanding business venture.

Your Tenant Rep Broker also lends their market knowledge and has the ability to effortlessly navigate the moving parts of a lease. A well-versed Tenant Rep Broker knows what is available, who represents the owner and submarket rental rates. A deal is really an equation for these landlords so good Tenant Rep Brokers know how to calculate what is available and suggest where the ‘give’ is for each space. For example, a property with a high vacancy rate may have flexibility in its asking rent, whereas the final vacancy of a property may be firm on the asking price, but willing to offer a tenant improvement allowance to build out the space.

Tenant Rep Brokers also know the complicated dynamics of leasing and facilitate the process from start to finish. Including, finding and touring available spaces, presenting offers and letters of intent with credit statements and proof of financials, negotiating terms to get to a lease draft, reviewing a lease with an attorney when needed, advising on the time and cost estimates if there is a buildout, guidance on required permitting through the city- all these of which are done with the tenant’s best interest in mind.

Lessor Rep Brokers are unconcerned with tenant needs and will not be of use to a prospective or hopeful tenant, which is why it’s important to remember who is on your side.  Working with a professional and having someone advocate for you through such a large life milestone is invaluable.

To learn more about Tenant Representation, please reach out to Alec Spencer at aspencer@intersectioncre.com 

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

written by
Rocco Cortese

Intersection is pleased to announce the sale of a fully leased and stabilized internal investment fund property managed by Intersection

Experiential Poway Retail Center Closes for $13.5 M

Senior Directors, Kyle Clark, and Dan McCarthy along with Senior Associate Alec Spencer, represented the seller in the sale of the North County retail center, Old Poway Village at 14005-14055 Midland Road, Poway CA. The 35,191 square-foot award-winning center consists of a selection of carefully curated retail tenants.

The property was sold as a fully leased and stabilized investment. After acquiring the property in 2017, Intersection established a new vision for the center that focused on building a destination lifestyle center for the Poway Community. To accomplish this, Intersection replaced several non-performing tenants with new, carefully curated businesses to create a retail experience conducive to the family neighborhood of Poway and surrounding North County residents.

Artisan Food and Beverage tenants The Hop Stop, Smokin’ J’s, and Mission Cellars anchor the center, and they are complemented with users such as the Bark and Collar, Poway Music Academy, Poway Pilates, and a lineup of other local tenants that support a unique dining and shopping experience.

“This has been a true passion play for Intersection.” Said Mark Hoekstra, Managing Director of Intersection. “I grew up in this neighborhood and always felt that this center could become something special. It has been an amazing journey seeing this property transform”.

The property was sold to a 1031 Exchange Buyer who closed within 45 days of opening escrow. “We positioned this asset to sell with clean triple net leases, good lease term on the rent roll, and have maintained the property impeccably.”, shared broker Kyle Clark “The Escrow was smooth with no surprises.”

The buyer plans to hold the asset long-term drawing upon the stabilized cash flow. “This property performed very well during the pandemic.” Stated broker Dan McCarthy. “Our tenant base was resilient, and the many outdoor areas benefited our food and beverage tenants significantly.”

To learn more about this deal please reach out to Kyle Clark at kclark@intersectioncre.com or Dan McCarthy at dmccarthy@intersectioncre.com

Autumn Valencia is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. For general and marketing inquiries, please contact Autumn at avalencia@intersectioncre.com 

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