Office Sale Reflects High Demand in Northern San Diego Coastal Suburb

Lou Hirsh

August 28, 2022

Boston Investment Firm Buys Pair of Carlsbad Buildings for Nearly $90 Million

A Boston investment firm acquired a pair of Carlsbad, California, office buildings for approximately $88.8 million in one of the largest deals of the past year in the northern San Diego suburb.

Tritower Financial Group purchased the two-building complex known as Atlas, built in 2016 at 5909 and 5919 Sea Otter Place, from investment firm Regent Properties of Los Angeles, according to public data and brokerage Cushman & Wakefield.

Brokers at Cushman, which represented the seller, said in a statement the complex totals approximately 231,000 square feet on 14.3 acres and was 81% leased at the time of sale. Tenants include medical device maker DJO Global, tech firms Nortek Control and Airspace Technologies, and Synteract, a division of biotech firm Syneos Health.

Cushman broker Aric Starck said elements added during a 2016-2017 redevelopment of the buildings made it attractive to investors, including open floor plans, floor-to-ceiling glass lines, clear heights up to 24 feet and heavy power capacities geared to technology firms.

CoStar data as of Aug. 1 shows this was the largest office deal in Carlsbad and among the largest in San Diego’s North County region during the past year. The per-square-foot price of approximately $384 was also above the average $334 paid for Carlsbad office properties in that time span.

Coastal Carlsbad, about 35 miles north of San Diego, is one of the region’s more active hubs for tech and biotech companies outside of San Diego itself. The region’s fifth-largest city also has a high percentage of residents with degrees in science, technology, engineering or math-related fields.

CoStar data shows Carlsbad is also among the region’s few large office enclaves where the vacancy rate has fallen from pre-pandemic levels, with the city seeing three consecutive quarters of positive net absorption, or more space being filled than vacated.

The city’s office vacancy is at 11.6%, with rents rising 4.2% in the past year. During that time, Carlsbad posted $320 million in office property sales, more than doubling the prior year’s tally, according to CoStar Market Analytics data.