The Heights at Del Mar, a two-building Class A office park in Del Mar Heights, California, was purchased this week by Kilroy Realty Corporation for approximately $126 million. Los Angeles-based Kilroy acquired the campus from Prudential Real Estate, according to brokerage company Cassidy Turley, which represented both the buyer and seller. The Heights at Del Mar is anchored by Neurocrine Biosciences and Knobbe Martens, both of which have long-term commitments in place and combined occupy 94% of the campus.
"The Heights encompasses all the characteristics we seek in an acquisition," said John Kilroy, Jr., Kilroy Realty's Chairman, President and Chief Executive Officer. "It has a strong initial cash return in the mid 6% range, high-quality tenants, strong submarket fundamentals, adjacency to transportation as well as a wide range of retail amenities and the upside potential of additional development. Together, both The Heights and One Paseo will complete our vision of developing a remarkable, urban, mixed-use, live, work and play environment in one of the best and consistently highest demand coastal submarkets of San Diego."
The knowledge-based office and life science campus at 12770-12790 El Camino Real covers 13.8 acres with a total of approximately 219,000 square feet of office space and a subterranean parking structure. The campus also includes a land site that is fully entitled for a state-of-the-art 90,000-square-foot office building to be LEED certified. Cassidy Turley broker Rick Reeder said the next phase of new speculative development in the high-demand Del Mar Heights neighborhood is not expected for three to four years, and the acquisition likely gives Kilroy "a strategic window of opportunity" to meet upcoming demand as the economy continues to improve, according to a San Diego Business Journal article.
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