EastGroup Properties Buys $135M San Diego Industrial Center

Viva Logistics Center II. Image courtesy of JLL Capital Markets

EastGroup Properties has paid $135 million for Viva Logistics Center II, a 547,000-square-foot, Class A logistics center in southern San Diego. JLL brokered the transaction on behalf of the seller, Siempre Viva Industrial II LLC, an IDS Real Estate Group affiliate.

The 29-acre industrial park encompasses four buildings developed between 2001 and 2003. IDS Real Estate Group acquired the portfolio in 2018 from AFL-CIO Building Investment Trust, for $67.5 million, CommercialEdge data shows. 

Following renovation and redesign in 2020, the facilities received Energy Star certification. The tenant roster includes logistics companies Kuehne + Negel Inc., Am-Mex Internationala, UPS and Bose.  

The properties feature cross-dock and rear dock loading doors and 32-foot maximum clear heights. The largest asset is the 258,053-square-foot Building F at 9043 Siempre Viva Road, located within the Foreign Trade Zone. The asset offers 42 dock-high and 2 grade-level loading doors, truck court of maximum 180 feet, 60-foot column spacing and more than 460 parking spaces.

Located at 8690 Kerns St., 2660 Sarnen St. and 8863 and 9043 Siempre Viva Road, the properties are right next to the U.S.-Mexico border, a short distance from the Tijuana International Airport. The Port of San Diego and the San Diego International Airport are some 25 miles away. The industrial park is within a mile of the Otay Mesa Freeway, which connects to interstates 805 and 5.

The JLL Capital Markets team that brokered the deal on behalf of the seller included Senior Managing Director Mark Detmer, Senior Director Ryan Sitov and Director Ryan Spradling, among others. Vice President Andy Irwin and Executive Vice President Greg Lewis, with JLL Industrial Brokerage, were also involved in the transaction.

A booming market

According to JLL’s third-quarter report on San Diego, since the start of the year, some 1.5 million square feet of industrial space has been absorbed in the Otay Mesa submarket, where the industrial park is located. The figure represents 8.5 percent of existing inventory and makes the area one of the best performing San Diego submarkets. The vacancy rate was also low at the end of the third quarter, reaching 3.9 percent.

Overall, industrial demand pushed both absorption rates and rent gains to record levels in San Diego. Over the last three years, asking rates increased 10 percent across the county, the JLL report shows. The sales volume is also on track to be the highest in recent years.

One of the largest transactions this year includes North County Corporate Center, a 493,900-square foot industrial park in Vista, Calif. Black Creek Group acquired the asset from Barings, for $147.5 million in September. At the time it changed hands, the property was fully leased.