10807thornmint oerin memoranum
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POWAY
10807 ) THORNMINT
THORNMINT ROADCAMINO SAN BERNARDO
CAMINO DEL NORTE
...AND MORE
RANCHO BERNARDO TOWNE CENTER ...AND MORE
10807 THORNMINT
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79Agra
Fallbrook
CampPendleton
North
Bonsall
VistaOceanside
Carlsbad
Escondido
EncinitasRancho
Santa Fe
Solana Beach
Del Mar
Mira Mesa
La Jolla
Pacific Beach
Chula Vista
El Cajon
Lakeside
Alpine
Dulzura
Descanso
Stallion Oaks
Pine Hills
Julian
Santa Ysabel
Ballena
San Felipe
WarnerSprings
La JollaAmago
Mesa Grande
Pala
Valley Center
Ramona
Poway
SAN DIEGO
PalomarMountain
CBRE Broker Lic. 004009987
© 2018 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk.
Photos herein are the property of their respective owners. Use of these images without the express written consent of the owner is prohibited.
CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners. All marks displayed on this document are the property of their respective owners.
MIRAMAR
...AND MORE
10807 ) THORNMINT
Anthony DeLorenzoGary Stache
Doug MackMichael Spiezia
Mark Shaffer
Orange County Los AngelesThomas Adelson
West Los AngelesMatt Pourcho
San DiegoSammy Cemo
Inland Empire
10807 THORNMINT
04
Matt Pourcho | San Diego Lic. 01705763 +1 858 546 4622 matt.pourcho@cbre.com
Anthony DeLorenzo Lic. 01706686 + 1 949 725 8425 anthony.delorenzo@cbre.com
Gary Stache Lic. 00773736 +1 949 725 8532 gary.stache@cbre.com
Doug Mack Lic. 01804065 +1 949 725 8571 doug.mack@cbre.com
Scott W. Peterson Lic. 01383970 +1 858 546 4607 scott.peterson@cbre.com
Jim Hatch Lic. 01236415 +1 858 546 2618 jim.hatch@cbre.com
CAPITAL MARKET EXPERTS
LOCAL MARKET
Scott D. Kincaid Lic. 01228568 + 1 858 546 4691 scott.kincaid@cbre.com
DEBT AND STRUCTURED F INANCE
10807 ) THORNMINT
SAN DIEGO
10807 THORNMINT05
INVESTMENT OVERVIEW 06PROPERTY OVERVIEW 12
MARKET OVERVIEW 18
FINANCIAL OVERVIEW 20
CONTENTS
10807 THORNMINT07
ADDRESS: 10807 Thornmint Road, San Diego, CA 92127
NUMBER OF BUILDINGS One (1)
LAND SIZE: ± 8,250 SF / ± 0.19 Acres
PROJECT SIZE ± 12,760 SF
ASKING PRICE $3,509,000 ($275/psf)
WEBSITE ipsocal.com/10807Thornmint
INVESTMENT SUMMARY
10807 THORNMINT
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INVESTMENT HIGHLIGHTS
IDEAL CORPORATE HEADQUARTERS OWNER/ USER OFFICE OFFERING
• The Property consists of an attractive high-image office building with large floor plans, an impressive lobby, exceptional glass line with hillside views, building-top signage and excellent egress/ingress. The Property would serve as an ideal corporate headquarters for an owner-user seeking a lease savings trade-off.
• The fully-available Property is an exceptional opportunity for an owner-user to acquire the only office building for sale in Rancho Bernardo market that offers both 10,000+ square feet of contiguous space for occupancy and a parking ratio of over 4 per 1,000 square feet. The purchase provides this owner-user investor protection against future rental market uncertainty and rate hikes, after-tax equity accumulation, and consistent cash flow that provides both debt payments and higher yields.
• The Property’s large and open floor plates promote highly-versatile space configuration, including potential creative office conversions that can attract and retain top talent attracted to collaborative work settings.
10807 THORNMINT09
ATTRACTIVE RANCHO BERNARDO LOCATION WITH EXCEPTIONAL REGIONAL ACCESS
• The Rancho Bernardo submarket is well-established as San Diego’s second largest technology hub with the largest concentration of the region’s defense contractors. Corporate tenants include Northrop Grumman, General Atomics, BAE Systems, ATK Aerospace and SAIC, Sony, Broadcom, Fitbit, Hewlett Packard, Cymer and Microsoft.
• The Property has excellent regional access and is well-served by San Diego’s major freeways. It is only one mile from the I-15, near the I-15/SR-56 convergence, with central access to both North and South San Diego.
• Surrounding the Property is an abundance of amenities, including proximity to an exceptional employment base and quick access to both executive and workforce housing. The Property’s three-mile radius is supported by 2,813 businesses and a 36,901-employee base, an adult population that is 63% college-educated and an average household income that is $130,947.
• Surrounding amenities reflect the largest retail hub along the 1-15 Corridor, totaling more than 1.2 million SF. Within 3 miles, there are of 69 eating establishments, including 17 restaurants (specifically), 20 banking/ATM sites, 10 grocery stores, 7 health and fitness centers, and 5 hotels—many of which are at nearby 240,060-SF 4S Commons Town Center.
BELOW REPLACEMENT COSTSPriced significantly below the estimated replacement cost of $318 PSF.
10807 THORNMINT
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INVESTMENT HIGHLIGHTS
STRONG MARKET FUNDAMENTALS • San Diego’s $215-billion economy is among
the top 15 in the nation that is outpacing neighboring Los Angeles/Orange County with an average annual growth of 3.37%, supported by strong population growth, high employment, and one of the nation’s top technology bases.
• The San Diego office market has experienced positive net absorption in 29 of the past 34 quarters, with a 5-year annual absorption average of 1.19M SF.
• Central San Diego is the County’s premier and best-performing office market, with strong absorption totaling 510,091 in 2017. In particular, low-rise office demand is high, as reflected in the product’s 6.0% vacancy. Low-rise office in Rancho Bernardo remains strong, with a vacancy of 8.6% in 4Q17.
• CBRE Econometric Advisors forecasts strong 15.4% rental rate growth over the next five years, supported by strong tenant demand and tightening market conditions in Rancho Bernardo.
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ADDRESS: 10807 Thornmint Road, San Diego, CA 92127
APN: 678-291-32
BUILDING SIZE: ± 12,760 SF
LAND SIZE: ± 8,250 SF / ± 0.19 Acres
YEAR BUILT: 2001
STORIES: Two (2)
PARKING: 57 Approximate Spaces
CONSTRUCTION TYPE: Concrete, Wood, SteelExterior Finishes, Doors & Windows: Concrete, Stone, Curtain Walls, tinted glass, Aluminum Window Systems, metal doors, and the front lobby has ADA Auto Opener Swing Door System
ELEVATOR TYPE: Hydroelectric
HVAC SYSTEM: Package Heat Pumps/Carrier; Exhaust Fans/Greenheck
ROOFING SYSTEM: 20PSF Live Load Reducible; Wood, Steel, joists
STOREFRONT SYSTEM: Front lobby has ADA Auto Opener Swing Door System
ELECTRICAL SYSTEM: Basic Electrical System – gas, primary electrical, secondary electrical, SDGE transformer, meters (no lighting systems onsite)Life Safety/Fire Protection: Full Sprinkler System, Suppression System and Fire Extinguishers
ALARMS SYSTEM: DMP
ZONING: M
UTILITY PROVIDERS: GAS: SDGEELECTRIC: SDGEWATER: OlivenhainWASTE SERVICES: Managed by AssociationTELECOMMUNICATIONS: Cox Comm / AT&T as back-up
PROPERTY SUMMARY
10807 THORNMINT
014PARCEL MAP
10807 ) THORNMINTThis map was prepared for assessment purposes only. No liability is assumed for the accuracy of the data shown. Accessor’s parcels may not comply with local subdivision or building ordinances
POWAY
10807 ) THORNMINT
THORNMINT ROADCAMINO SAN BERNARDO
CAMINO DEL NORTE
...AND MORE
RANCHO BERNARDO TOWNE CENTER ...AND MORE
RANCHO BERNARDO IS ONE OF THE LARGEST AND MOST VIBRANT COMMUNITIES IN SAN DIEGO COUNTY
5785 THORNMENT
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VERV
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MIRAMAR
...AND MORE
10807 THORNMINT019
2017 Population179,063
Number of Companies5,078
Household in 5 Miles64,570
Number of Employees59,321
Average Household Income$140,276
MARKETING HIGHLIGHTS
CORPORATE IDENTITYIn 2015, Petco moved into its newly acquired and repositioned 303,000-square-foot Rancho Bernardo Corporate Headquarters, another prime example of the trend of repurposing older industrial buildings to higher-end uses. Industry giants such as Sony, Petco, Hewlett-Packard, Northrop Grumman, BAE Systems, and General Atomics have all long-occupied space in the Rancho Bernardo business park. Other large corporate users that have chosen to locate in RB include Cymer, Broadcom, Scripps Health, Microsoft, State of California agencies and Bridgepoint Education.
RESIDENTIAL BASEBy offering attractive economics on large land parcels to major employers such as NCR, Sony, General Dynamics, Hewlett Packard and Burroughs (Unisys), AVCO spawned demand for their high quality residential developments within RB. Nationally renowned school districts and immediate access to higher-end residential communities have been a major benefit to the Rancho Bernardo office market. Within proximity are the master planned communities of 4S Ranch, Del Sur, Santa Luz, Poway, Rancho Penasquitos, Carmel Mountain Ranch and Scripps Ranch. Along with RB, these communities make up the core of the I-15 Corridor. The I-15 Corridor has historically been one of San Diego’s fastest growing areas, spurred initially by tremendous residential growth followed by office, industrial and retail development.
ACCESSRancho Bernardo features easy access to anywhere in San Diego County. Interstate 15 is the primary north-south thoroughfare running directly through Rancho Bernardo, while State Route 56 and Highway 78 provide convenient east-west links to the western areas of San Diego including the beaches. San Diego International Airport is less than 30 minutes away. Local bus transportation is provided through the North County Transit System and the San Diego Transit System. There are bus stops throughout the community with regularly scheduled stops every day of the week.
DEMOGRAPHIC OVERVIEW. WITHIN 5-MILE RADIUS
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N:\Shared\SUPPORT\Private Client\TEMPLATES\_PCGNB Folder Template\01-RFP and Offering Memorandum\8 - Replacement Cost Analysis\Copy of REPLACEMENT - Thormint.xls
Land Size 8,276 Square FeetBuilding Size 12,760 Square Feet
HARD COSTS
Land Acquisition Cost @ 35.00$ 289,660$ Hard Costs @ 140.00$ 1,786,400$ TI's on Office 85.00$ 1,084,600$
3,160,660$ 78%
SOFT COSTS
A & E @ 2.0% 63,213$ Insurance $0.37 PSF 4,721 Property Taxes 1.03% Hard Costs 32,555 Development Fees $3.00 PSF of Bldg. Area 38,280 Legal 1% Hard Costs 31,607 Developer's Profit 8% Hard Costs 252,853 Loan Fee 1% Hard Costs 31,607 Contingency 2% Hard Costs 63,213 Interest on Land Carry 3% Land Cost 8,690 Interest on Construction 5% Hard Costs 158,033 Interest on Lease Up 3% Hard Costs 94,820 Leasing Commission 9.54$ PSF 121,730
901,321$ 22%
4,061,981$ 100%
318.34$
Economic Rent CalculationReplacement Costs 318.34$ Required Return 10.0% 31.83$ Operating Expenses $0 -$ Less Vacancy/Credit 5% 1.59$ Economic Rent Required, PSF per year (NNN) 33.43$ Economic Rent Required, PSF per month (NNN) 2.79$
TOTAL HARD COSTS
TOTAL SOFT COSTS
Total Development Costs
Cost Per Square Foot
Financial Information Disclaimer: You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.
REPLACEMENT COST
10807 THORNMINT021
10807 THORNMINT
022AFFILIATED BUSINESS DISCLOSURE
CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).
CONFIDENTIALITY AGREEMENT
Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.
If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc.
DISCLAIMER
This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.
The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.
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