A joint venture between two Orange County investment firms — Harbor Associates and F&F Capital Group — has paid $77 million for the Highlands Corporate Center in San Diego, The Real Deal has learned.
The five-building, Class A office campus is about 90 percent leased and totals 211,000 square feet. It’s located in San Diego’s Del Mar Heights neighborhood at 12730-12780 High Bluff Drive.
Harbor, based in Seal Beach, represented itself in the deal. Eastdil Secured’s Adam Edwards, Justin Shepherd and Bailey Bland represented the undisclosed seller. Property and state records show the seller is an LLC tied to a Chicago-based registered agent. F&F Capital is based in Irvine.
The price works out to almost $365 per square foot. For comparison, office buildings in Downtown Los Angeles currently trade in the $130 to $150 range, and the market’s Union Bank building recently sold for $114 per square foot, a new low. Last month, Irvine Company sold a San Diego office building to Formosa Limited for $86 a foot.
In an announcement on the deal, Harbor’s Rich McEvoy cited the property’s proximity — walking distance to the One Paseo mixed-use center — as one reason the campus has inked 40 new leases and renewals over the past three years.
Harbor’s Justin Loiacono cited a “reset” on office pricing that has offered investment opportunities in “high barrier-to-entry markets.”
The deal marks the latest activity in San Diego’s broader office investment market, where trades rose in the third quarter, according to a Jones Lang Lasalle report. Transaction activity in the quarter was led by deals such as Formosa Limited’s purchase of the Symphony Towers from the Irvine Company for a reported $45.7 million and Hazard Center, which was bought by BH Properties for $68.3 million.
On the leasing side, office vacancy in San Diego stood at 14 percent in the third quarter, marking the highest the metric has been in over a decade, according to JLL, with renewals and relocations driving the quarter’s leasing activity.