San Diego Creative Office Asset Lands $121M Refi

AMP&RSAND

A joint venture between Westbrook Partners and The Casey Brown Co. has received a $121.3 million bridge loan from CIM Group for AMP&RSAND, a 342,742-square-foot creative office campus in San Diego. The new financing package pays down a $110.5 million loan, which Oaktree Capital Management originated in 2018, CommercialEdge data shows.

Cushman & Wakefield’s Rob Rubano arranged the loan.

The former home of The San Diego Union-Tribune, AMP&RSAND opened its doors in 2018 following an extensive redevelopment project to shift the asset from its previous use as a printing press into a creative office campus. The largest tenant, Encore Capital Group, became the property’s first after signing a full-floor lease in September 2018 for approximately 41,000 square feet. Another major tenant, QDOBA Mexican Eats, moved its headquarters to 34,000 square feet on the fourth floor in 2019.

Located at 350 Camino De La Reina in the Mission Valley submarket, the two buildings offer 37,852-square-foot average floorplates, 14-foot ceilings, a 5,000-square-foot fitness center and nine patios totaling 64,000 square feet of outdoor space.

Life sciences buoying market

San Diego’s office market struggled in 2020, with CommercialEdge showing that same-store asking rates dropped by a stunning 11.7 percent, the largest downshift nationwide. Mission Valley has not been immune. A fourth-quarter office report from JLL pegs the submarket’s net absorption at negative 260,000 square feet in 2020, with vacancy holding at 15.4 percent, well above the overall market’s 13.3 percent.

The market’s Class A assets have thus far remained resilient, though slowed leasing velocity amid tenant consolidations and downsizing are likely to intensify headwinds. Even so, San Diego’s life sciences sector continues to play an important role in the office sector’s health, amid escalating nationwide demand pushing rents ever higher.