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Downtown Office, Apartment Tower is New HQ for SANDAG

REAL ESTATE: 15-Year Lease is First for 37-Story West

Nearly a third of the office space in a $450 million downtown project has been leased to SANDAG (San Diego Association of Governments) as the transportation planning agency’s new headquarters.

Brent Schertzer
Managing Director
Holland Partner Group

The 15-year lease is for 87,000 square-feet of the 37-story West mixed use project under construction at 1011 Union St. on the former site of San Diego Superior Court by Holland Partner Group, North American Sekisui House and Lowe.

The value of the lease was estimated at $5.4 million over the 15-year term.

Due for completion in the first quarter of 2024, West will have 431 apartments, 280,000 square feet of offices, and 19,000 square feet of retail space.

SANDAG is leasing two full floors and a portion of the ground floor for its board room and displays, moving its headquarters from the Wells Fargo Plaza building at 401 B St.

Mike McNerney
Executive Vice President
Lowe

West is along the trolley line, adjacent to the Courthouse station and four blocks from the Santa Fe Depot train station.

“For SANDAG, part of the draw was really the proximity to transit,” said Brent Schertzer, managing director of Holland Partner Group.

Because West combines housing, offices and retail in one location, “West is really a project that epitomizes what they’re trying to accomplish,” said Mike McNerney, executive vice president of Lowe, alluding to the agency’s goal of encouraging transit-oriented projects that combine housing with workspace.

Lowe is leading the office development at West, which has apartments stacked atop the office levels, separated by a ninth floor of shared amenities.

Right Sizing

“We want to keep the good companies that we have downtown in downtown. I think that’s sort of job one as downtown continues to evolve from an 18-hour-a- day city to a 24-hour-a-day city,” McNerney said. “SANDAG was a key target for us early on because of their mission in providing transportation for the San Diego region.”

Richard Gonor
Executive Vice President
JLL

The SANDAG lease is the largest new office lease downtown in the past seven years, and the only downtown project built on speculation to sign tenants while still under construction in 20 years, according to JLL, which is handling the leasing of West.

“It will be the only new development project that’s going to be fully activated when the project is completed,” said Richard Gonor, executive vice president of JLL in San Diego.

In moving from 401B St., SANDAG will consolidate its operations, which had been spread over several floors.

Unlike many older buildings downtown, West has floorplates of 40,000 square feet to better accommodate larger businesses such as SANDAG, Schertzer said.

“For SANDAG, that represented an opportunity to get more usability with the square footage,” Schertzer said.

Typically, downtown buildings have floorplates of 15,000 to 20,000 square feet, Schertzer said.

The agency was leasing about 114,000 square feet at 401B St. but will require less space in West because it won’t have to duplicate areas such as break rooms as it did at 401 B St., McNerney said.

“What we’re seeing across the country right now is that every company is trying to figure out how do they find the right mix of work from home and work at the office, what’s the right balance and how do they attract their associates to come back to the office, McNerney said. “If you can locate your business close to where your associates live, you’re going to have a higher probability of keeping them and attracting the best and the brightest.”

Holland Partner Group

Founded: 2000
CEO: Clyde Holland
Headquarters: Vancouver, WA
Business: mixed-use commercial real estate developer and investor
Employees: 750+
Annual revenue: $702 million in 2022
Website: www.hollandpartnergroup.com
Contact: info@hollandpartnergroup.com/
360-694-7888
Notable: With California offices in San Diego, Long Beach and Oakland, the company has more than $4 billion of assets under management.

Lowe

Founded: 1972
Headquarters: Los Angeles
CEO: Robert J. Lowe Jr. and Michael H. Lowe
Business: real estate investment, development and management
Employees: 5,000+
Website: www.lowe-re.com
Contact: 310-820-6661
Notable: Over the past 51 years Lowe has developed, acquired or managed more than $36 billion of real estate assets nationwide.

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