$82.46M refinancing secured for San Diego office property

SAN DIEGO, May 20, 2024 –  JLL Capital Markets announced today that it has arranged an $82.46 million refinancing for Sunroad Centrum Office Tower, an 11-story, Class A office building totalling 274,758 square feet in San Diego, California.

JLL worked on behalf of the borrower, Sunroad Enterprises, to secure the five-year, fixed-rate senior loan through Goldman Sachs.

Originally built in 2008, Sunroad Centrum Office Tower was previously 100% occupied by Bridgepoint Education who vacated in 2020 per their lease maturity. At completion Sunroad Enterprises invested $30.02MM ($110 PSF) in TIs and LCs to re-tenant the building and at closing the building was 100% leased. The new rent roll includes A Berkshire Hathaway Company (12.4% of RSF), Kyocera (4.0% of RSF), Appfolio (9.2% of RSF), Conam (5.4% of RSF), Veterans Administration (43.7% of RSF), California Government Departments (16.2% of RSF), and Sunroad’s Corporate Headquarters. Credit/Gov tenancy represented approximately 60% of the rent roll and building has WALT of 10.5 years remaining with no lease maturities until 2029.

“Although the market, both from a leasing and financing perspective are challenged, Sunroad Centrum was 100% re-leased and refinanced during this period. We are extremely proud of this successful execution,” states Sunroad President Dan Feldman. “Our team did an extraordinary job of re-tenanting an office building through one of the most difficult office leasing environments in history. The fact we were able to get the building fully leased and refinanced is a testament to the location, amenities and teamwork of our brokers, designers, architects and capital markets team.  And the fact that Goldman Sachs was the finance partner speaks to the financial strength of the tenant roll and Sunroad’s ownership.”  

Improvements to the project include a full-service gym and lockers, restaurant, conference centre, controlled access, renovated lobby and elevators, and abundant parking of nearly six per 1000. In addition, it is part of the Sunroad Centrum master plan, which includes 1,245 luxury apartments, Park Social Restaurant, six separate gyms, five pools, multiple amenity areas, a barber shop, pickleball courts, a two-acre park, which includes a separate dog play and child play area, and an active and integrated central street.

Sunroad Centrum Office Tower is positioned on a 1.47-acre site at 8620 Spectrum Center Blvd. in the Kearney Mesa submarket of San Diego. The building has frontage along Highway 163 and is close to Interstates 805 and 8 as well as State Route 52. The submarket is one of the most centrally located office markets in San Diego County and has attracted a significant corporate tenant base.

Feldman adds “I want to especially thank JLL’s Debt Advisory team led by Senior Managing Directors Aldon Cole and Tim Wright and Vice President Bharat Madan.  We had intense competition to finance this project, and this team’s guidance, advice and collaboration were integral in selecting Goldman Sachs and assisting all the way through execution.”

“Centrum exemplifies what success means for the new-era of office,” added Cole. “A central location, Class A improvements and amenity packages, including quality on-site and walkable food offerings, a public park and several Class A multi-housing projects developed by Sunroad all contribute to a cohesive sense of place.” 

JLL’s Capital Markets group is a full-service global provider of capital solutions for real estate investors and occupiers. The group’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

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Jones Lang LaSalle Americas, Inc. ("JLL") is a real estate broker licensed with the California Department of Real Estate, license #01223413.