IRG, Belzberg Plan $1B Development at San Diego Airport

Metropolitan Airpark at Brown Field Municipal Airport. Image Metropolitan Airpark

A long-delayed $1 billion plan to redevelop 331 acres at San Diego’s Brown Field Municipal Airport is moving forward now that Los Angeles-based Industrial Realty Group has acquired a 43 percent stake in a joint venture with Belzberg & Co. for the Metropolitan Airpark project.

Located in the Otay Mesa submarket near the United States-Mexico border, the new facilities will support the region’s demand for industrial space. The City of San Diego recently approved IRG as a joint venture partner with Belzberg & Co., a family-backed investment firm and controlling shareholder of Metropolitan Airpark. The approval and purchase of the existing Metropolitan Airpark leasehold by the joint venture will set the stage for construction of the state-of-the-art commercial and aviation facilities.

The project is expected to be built over 20 years and will include a new Fixed Base Operator terminal building and individual airplane hangars. Additional development could include more than 1 million square feet of retail and industrial buildings and possibly a hotel.

“IRG is a great fit with their airport redevelopment experience. Their project is well designed with truck yards adjacent to the building, which is highly desired in Otay Mesa,” Rob Hixson, a senior vice president with CBRE in San Diego who is leading preleasing efforts, told Commercial Property Executive.

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One of the nation’s largest industrial real estate developers, IRG operates a portfolio of more than 150 properties in 31 states with more than 100 million square feet of space. The firm is recognized as a leading force in adaptive reuse of commercial and industrial space.

The company has redeveloped a dilapidated Baltimore steel mill and transformed McClellan Air Force Base in Sacramento, Calif., into industrial space. In April 2021, IRG bought the former site of Caterpillar’s hydraulic manufacturing operations, a nearly 1.5 million-square-foot industrial site outside Chicago, with plans to turn into a multi-tenant industrial park. Earlier in 2021, IRG acquired five Gannett Co. Inc., printing plants in Ohio, Indiana and Florida in a sale-leaseback deal that also gave IRG the right to redevelop portions of the space for multiple tenants and other industrial or manufacturing uses.

Jason van Itallie, managing director of Canadian-based Belzberg & Co., said in a prepared statement the firm was pleased to have found a well-qualified partner in IRG to help take the next step in the development of Brown Field.

Stuart Lichter, IRG president, said in prepared remarks, there is an immediate need for quality industrial space in the San Diego market. Lichter said the location at the airport in Otay Mesa will be attractive to air-related businesses or those desiring to expand in the tight market that is a gateway for international trade. Lichter added the project should provide economic benefits to the community and create sustainable jobs.

San Diego-area industrial developments

In late August, Murphy Development Co. secured a $35.4 million construction loan for Phase II of its 50-acre Brown Field Technology Park in Otay Mesa. The development will include two Class A industrial buildings totaling 203,244 square feet of space and is slated for delivery in the second quarter of 2023. The park is less than 1 mile from Brown Field Municipal Airport.

Rockefeller Group bought three parcels totaling 11.6 acres in Chula Vista, Calif., in May to develop three industrial buildings totaling 201,200 square feet. Construction on Heritage Park, located less than 4 miles from Brown Field Municipal Airport, is scheduled for completion by the winter of 2023.