Office Property in San Diego Technology Hub Gets New Owners
January 6, 2022
Investors Increase Holdings To Capture Growing Life Science, Tech Demand
An office building in a key San Diego technology hub changed hands as investors aim to boost their presence amid rising regional demand for life science and other tech-related space.
Innovatus Capital Partners of New York and Lincoln Property Co. of Dallas acquired the five-story property known as The Pinnacle, built in 2007 at 10920 Via Frontera, for an undisclosed price. Lincoln’s Western U.S. affiliate, LPC West, will be managing the property.
The building, spanning approximately 110,000 square feet, is in San Diego’s Rancho Bernardo neighborhood near Interstate 15. The enclave has seen significant expansion during the past few years by large technology and defense firms, including Amazon, Apple and Northrop Grumman.
Innovatus Managing Director Bradley Selden said in a statement that the acquisition is part of the firm's strategy to acquire well-appointed office properties “in high-growth micro markets.” Selden said the company teamed with Lincoln Property for planned nationwide investments, “and entering the growing San Diego technology and life science market has been a goal for some time.”
The Pinnacle was last purchased in June 2018 for $31.2 million by Denver's Ascentris and Harbor Associates of Long Beach, California, according to CoStar and public data. The property has since undergone significant upgrades to its lobby, locker rooms and landscaping, along with the addition of electric vehicle charging stations.
The property is fully leased by tenants including financial services firm Charles Schwab, business technology provider Applications International Corp. and real estate management firm ShopCore Properties.
San Diego has seen a significant rise in office purchases during the past year, especially as buyers look to repurpose older properties to suit the growing needs of life science and technology companies. Life science in particular has fueled office acquisitions in neighborhoods such as Sorrento Mesa and University Town Center.
Rancho Bernardo, in northeastern San Diego, is among the city’s largest office markets by property value but generally gets less investor attention than the enclaves to the west. Still, office investment in the neighborhood reached $90.3 million during the past 12 months, nearly doubling the year-earlier figure, as office rents grew by 1.6%, according to CoStar Market Analytics.
Rancho Bernardo “provides attractive investment opportunities with a diversified tenant pool for local and national investors when properties become available,” said Joshua Ohl, director of market analytics for CoStar Group in San Diego.