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Office Market Reports Record Results From 2005

The county’s office market posted its best year since 2000, according to Colliers International’s fourth-quarter report, while relatively sunny days should continue for the county’s industrial market into 2006. San Diego’s office market enjoyed strong net absorption, decreasing vacancy, and the second highest level of new supply added in the last five years, according to the report. Some tidbits:

– Net absorption of 704.1 million square feet in the fourth quarter added to the 2005 total net absorption of more than 2.5 million square feet.

– Demand has kept pace with new supply, thereby keeping the market in balance.

– The total vacancy of 9.3 percent was lower than the 11.3 percent at the end of 2004.

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– In 2005, 1.9 million square feet were completed, and an additional 3.7 million square feet are under construction.

On the industrial side, Colliers reports that vacancy , at 6.8 percent , is lower than the national rate of 8.4 percent.

More tidbits:

– Vacancy in 2005 dropped to 6.8 percent, compared with the 2004 vacancy of 7.8 percent.

– Sublease vacancy of only 1 percent was the lowest rate in five years.

– New supply added more than 2.6 million square feet to the inventory in 2006, with 1.4 million square feet in the fourth quarter alone.

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Up North:

Median home prices for all homes in North County , single-family detached and single-family attached , dipped slightly in January, from $555,000 in December to $553,000.

That’s the latest from the North San Diego County Association of Realtors.

– The median price single-family detached home in North County was $625,000 in January, a 2.5 percent increase from December. Prices were highest in Rancho Santa Fe (92091), at $3.1 million, while Rancho Santa Fe and Del Mar also commanded prices of more than $2 million; Bonsall, Encinitas, Carmel Valley and Cardiff-by-the-Sea all exceeded $1 million.

– Only two ZIP codes reported median prices under $500,000: Vista (92083), at $481,500, and Escondido (92027), at $492,000.

– The median-priced single-family attached home in North County was $405,000 in January, a 2.4 percent decrease from $415,000 in December.

– Prices were highest again in Rancho Santa Fe (92067), at $972,500, followed by Del Mar, Cardiff, Solana Beach, Carlsbad and Encinitas. Vista and Escondido had single-family attached median prices under $300,000.

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Moneymakers:

Barratt American, a Carlsbad-based residential builder, announced 498 closed home sales for 2005, amounting to $316.6 million , an all-time record since the founding of the firm as a subsidiary of Barratt Developments PLC of Britain in 1980. That sum also included the sale of 122 lots to other builders.

The firm’s sales champ for the year was its recently completed eight-story Metrome condos in Downtown’s East Village, where 142 buyers closed escrow among the total of 184 units. Metrome was honored in 2005 with the San Diego County Grand SAM Award for highest achievement in homebuilding.

Realty Income Corp., an Escondido-based buyer of net-leased retail properties nationwide, reported an 18.5 percent rise in revenue for the fourth quarter to $53.7 million.

Dividends paid per share increased 5.8 percent, compared with the same quarterly period in 2004; revenue increased 13.2 percent to $196.7 million for the entire year of 2005, compared with $173.7 million in 2004.

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Big Deals:

The RSD Group in Old Town has sold Club Pacifica, a 240-unit condo rental community in Rancho San Diego, for $48.3 million to San Diego-based SilverStone Communities, which plans to convert the property to for-sale condos.

J. Kevin Mulhern, Dixie Hall, Dick Schneider and Rachel Hemingway of CB Richard Ellis’ San Diego office represented the seller and buyer in the transaction.

The Koll Co., a Newport Beach-based real estate acquisition, development and management firm, has acquired a four-story, 84,922-square-foot office building in Mission Valley for $17.5 million, and has targeted San Diego for additional small-tenant office purchases, according to the company.

The Mission Courtyard building, which sits on a 3-acre site at the northeast corner of Interstate 8 and state Route 163, was bought from Mission Courtyard LLC, a tenant-in-common partnership based in Scottsdale, Ariz.

The North Park community gathered on Feb. 15 to celebrate the grand opening of the North Park Parking Garage, a $14.5 million, five-level structure offering 388 parking spaces, and 14,000 square feet of retail space. It’s designed to accommodate the rising number of visitors and vehicles to the newly renovated North Park Theatre, and the revitalizing business and cultural district along University Avenue.

Knoxville, Tenn.-based Pilot Travel Centers LLC has sold a 25-acre parcel of industrial land at Eastside Piper Ranch Road in east Otay Mesa to Piper Otay Partner, LLC, for an undisclosed amount.

Located near Brown Field Municipal Airport, the land is expected to be developed for industrial or light retail uses, and is part of an 80-acre parcel that Pilot bought last year.

Rob Hixson, aided by Rich Kwasny and Shane Harmon of CB Richard Ellis, represented the buyer and seller.

Makar Properties LLC of Newport Beach has announced the sale of a 3-acre office tower parcel in La Jolla Commons to Hines for an undisclosed sum.

The fully entitled property is part of Makar Properties’ 17-acre mixed-use development of La Jolla Commons, located on the northwest corner of La Jolla Village Drive and Executive Drive in the University Towne Center area of La Jolla.

Buchanan Street Partners represented the buyer and seller.

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Kudos:

Paradise in Progress, a coalition of a dozen public and private organizations in the county, on Feb. 16 held its seventh annual awards event, honoring individuals and firms that helped keep things running relatively smoothly during construction and special events Downtown.

The winners were Webcor Builders for Broadway 655; Ledcor Construction for Broadway Lofts; PCL Construction for Diamond Terrace; Davis Reed Construction for Hotel Solamar; Swinerton Inc. for M2i; PCL Construction for Metrome; Pinnacle International for Pinnacle Museum Tower; the San Diego Padres for the Rolling Stones concert; and a special award to San Diego police Officer John Graham, a Downtown fixture of 20 years and a longtime supporter of the project.

Speakers at the event were Mayor Jerry Sanders and Nancy Graham, who heads the Centre City Development Corp., a Paradise member.

Standard Pacific Homes, whose San Diego operation is based in Carlsbad, made Fortune magazine’s annual list of “America’s 100 Best Companies to Work For,” clocking in at No. 74.


Send residential and commercial real estate news to pbroderick@sdbj.com or via fax at (858) 571-3628.

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