SAN DIEGO – In a serendipitous move, Murphy Development Company (MDC) has purchased the 542,197-square-foot, two-building campus at the San Diego Business Park (SDBP) on Otay Mesa from Panasonic Corporation of North America. In 1986 MDC built the campus for Sanyo, which was acquired by Panasonic in 2010. In addition to the $28 million purchase price, MDC plans to invest $15 million in upgrades.
Jamie Ragucci, Tim Greiner, Brent Bohlken and Bryan Teel of Newmark Grubb Knight Frank represented the seller in the transaction and Murphy represented itself.
The property, which will be rechristened The Campus at San Diego Business Park, is located at 2001 and 2055 Sanyo Avenue. The buildings are strategically located contiguous to the SR 11 and within a few hundred feet of SR 905, providing excellent freeway identity and access. Panasonic will lease approximately 70 percent of the 329,000-square-foot 2001 Sanyo Avenue building after MDC completes 42,000 square feet of new office improvements.
The remaining 94,000 square feet of Class A industrial space in the 2001 Building and 209,700 square-feet in the 2055 Building will be marketed for lease. The Campus also includes a seven-acre fully entitled parcel of land, which MDC plans to develop into either a 150,000- square-foot freestanding building or to expand the 2055 Building into a 350,000-square-foot building.
“The Sanyo building and the 1.3 million square foot San Diego Business Park was Murphy Development’s first Otay Mesa project and heralded the birth of a new San Diego industrial era. Now some 30 years later, Otay is San Diego’s most dynamic industrial growth area,” said Kaitlin M. Arduino, executive vice president of MDC.
Murphy Development completed build-to-suits for Fortune 500 companies Sanyo, Casio and American Home Products in its San Diego Business Park. Additional buildings were developed on a speculative basis and successfully leased to Maxell America, Hitachi Transport, Electrolux and Nippon Seiko. Sanyo was the first SDBP occupant when the initial building was completed in 1986.
“Murphy Development is extremely pleased to reacquire this jewel of an asset from Panasonic Corporation of North America,” said R. Michael Murphy, president of MDC. “Panasonic will remain the lead tenant in the campus. When we developed SDBP, it was situated on a hill by itself on the east end of Otay Mesa, close to the newly opened Otay Mesa Port of Entry. Now it retains its dominant location and is surrounded by freeways,” said Murphy.
“Panasonic has a long history in these buildings and within the region,” said Andrea Megnin, Panasonic North America’s group manager, Real Estate and Facilities. “ When we evaluated potential buyers, we were impressed with Murphy Development’s history with the project, the company’s overall renovation plans, and its commitment to corporate quality. We look forward to the transformation that MDC has planned for The Campus.”
MDC’s $15 million investment in upgrades at The Campus includes completely new landscaping, replacing all office glazing with energy efficient glass, modernizing the office areas, updating the solar panel system, and adding dock and grade doors. Murphy will also add a café, a physical fitness facility, and outdoor amenities including break areas.
Lusardi Construction Company will complete the improvements, which will be designed by Pacific Cornerstone Architects. Ridge Landscape Architects will design the new drought- tolerant landscaping.
“The newly renovated buildings will offer suites as small as 36,000 square feet,” said Andy Irwin, senior vice president at MDC. “We can expand the 2055 Building or construct a third building in approximately 12 months, offering manufacturing, distribution or R&D tenants space at the campus in excess of 450,000 square feet.”
Murphy Development has designed and completed in excess of 10 million square feet of corporate industrial and technology projects in San Diego. Grading has been completed at MDC’s next project, Brown Field Technology Park, a 50-acre, master-planned corporate industrial development, also in Otay Mesa, were MDC will develop a million square-feet of Class A industrial buildings. Current building designs range from 80,000 – 350,000 square feet and are designed for manufacturing and distribution tenants.
Additionally, MDC is completing build out of its 2.1 million-square-foot Siempre Viva Business Park with the recent groundbreaking of the 79,050-square-foot Building 17, located at 8500 Kerns Street in San Diego’s Otay Mesa.