Salt Lake City Investment Firm Buys Kearny Mesa Property for More Than $162 Million
By Lou Hirsh CoStar News October 11, 2022 | 3:49 P.M.
The San Diego sale of a newly built, Amazon-leased industrial building is among the region’s largest by total price for the past year, joining others across the country leased by the e-commerce giant that have commanded big price tags.
Investment firm Property Reserve Inc. of Salt Lake City acquired the 315,000-square foot Kearny Mesa Logistics Center, completed last month at 5670 Kearny Mesa Road, from Dallas-based Lincoln Property Co. for approximately $162.1 million, according to CoStar data and public deed filings.
The deal is among the largest for a single San Diego industrial property, and the per-square-foot price of approximately $514 is well above the market average of $342, for the past year. CoStar data shows Amazon signed a lease for 12 years and three months at the building, located in the low-vacancy, high-demand Kearny Mesa neighborhood of central San Diego.
“Amazon properties that have been sold in San Diego have among the highest valuations for logistics spaces and among the lowest cap rates in the market,” said Joshua Ohl, director of market analytics for CoStar Group in San Diego.
Ohl said long-term leases coupled with the continued business strength of Amazon remain selling points, though the Seattle-based company has been reported to be returning some space to the market for subleasing nationally. Amazon has also been closing warehouses and pulling back on some development projects nationwide this year in response to shifts in consumer demand in a volatile economy.
Still, properties leased by Amazon continue to draw high investor interest. Earlier this year, for instance, an Amazon-leased fulfillment center in Bondurant, Iowa, was acquired for approximately $362.2 million by investment firm Capital Square, according to public data. News reports at the time of the February deal said it was the largest property sale in the history of Iowa’s Polk County.
Representatives for the buyer and seller of the San Diego property did not immediately respond to requests from CoStar News to comment.
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