san diego real estate broker

CalSTRS to shop San Diego tower

California State Teachers plans to market a downtown San Diego office tower that may fetch $140 million.

Secured Capital, CB Richard Ellis and Burnham Real Estate have submitted marketing proposals for the 467,000-square-foot Wells Fargo Plaza, at 401 B Street. A broker should be selected this week.

At the expected sales price of $300/sf, the buyer's initial annual yield would be less than 7%--in keeping with the recent trend in the red-hot market. For example, local player American Assets will have an initial yield of roughly 6.7% on its $95.5 million purchase of the 330,000-sf NBC Building, at 225 Broadway. That transaction closed last week.

CalSTRS, which is advised by CB Richard Ellis Investors, acquired Wells Fargo Plaza in 2000 from Prime Property Fund for $90 million.

The property, at the southeast corner of B Street and 4th Avenue, is 90% occupied, with little lease rollover before 2011. Tenants include Wells Fargo, Citigroup, San Diego Association of Governments and law firm Gray Cary. Asking rents average $30.50/sf.

The property, which includes a five-story garage, is likely to attract the interest of core and core-plus players, including American Assets, DRA Advisors, Principal Global and Douglas Emmett, an operator of core-plus funds. Several REITs are expected to be in the running.

COPYRIGHT 2004 Harrison Scott Publications, Inc.
COPYRIGHT 2004 Gale Group