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Leste Group and Sason Organization Complete $25.3 Million Acquisition of Willow Creek Corporate Center in San DiegoLeste Group's real estate debt and structured equity arm, today announced that it partnered with the Sason Organization ("Sason"), a privately controlled real estate investment firm, to complete the $25.3 million acquisition of Willow Creek Corporate Center (recently rebranded "Canvas on Willow") in San Diego. Leste led the investment in the office property, a three-story office building comprised of 121,415 square feet. Located at 10089 Willow Creek Road, the property is within the heavily traveled Interstate 15 corridor of San Diego's Scripps Ranch - a thriving submarket where many businesses in the life sciences, communications, technology, defense and financial services industries are based. "We're excited to partner with Sason to continue investing thematically in high quality office assets in San Diego's resilient submarket and other markets where we see significant upside growth potential supported by strong secular tailwinds," said Larbi Benslimane, Managing Director of Leste Group, who oversees the firm's debt and structured real estate transactions. "This transaction reflects Leste's ability to employ a creative investment in premier quality office space designed to meet the immediate occupancy needs for high quality corporate tenants in San Diego, one of the most vibrant business, tourist and transportation gateways in the nation." Canvas on Willow, which counts blue-chip companies such as Lockheed Martin and Hitachi as tenants, is currently undergoing a $2 million renovation that includes a complete overhaul and modernization of the building's signature central courtyard to create a unique outdoor environment for work, rest, and play; and the construction of a new tenant lounge and fitness center with rollup doors allowing tenants to gain seamless access to the courtyard. The property's HVAC system and controls are also slated o be upgraded, along with a modernization of common areas throughout. "We are firm believers in the contrarian investment thesis around office as an investable asset class at this moment in time. With our focus on best-in-class assets in premier locations like Canvas on Willow, we're seeing that tenants that are seeking a differentiated, hospitality-focused experience at the office which we're able to provide through our repositioning program," said Joshua Sason, Principal at Sason. "This acquisition reflects our conviction that the demand for physical office space in which to collaborate, creating true enterprise value, is not going away. There are plenty of examples throughout history where an acute crisis causes an overreaction that generates a unique window of investment opportunity. It's our belief that this is most certainly one of those times, and we're already seeing the leasing activity and demand come back across our office portfolio to a significant degree." According to recent data from the U.S. Bureau of Labor Statistics, only 5.5 percent of businesses have reduced their office space since the beginning of the pandemic with most companies choosing to redesign their existing office space rather than relocate their workforce. The transaction is the second completed by Leste Credit and Sason, who previously partnered to acquire the value-add office asset Canvas on Chesapeake (formerly known as Chesapeake Corporate Center) in San Diego for $12.25 million in March. The property is situated in Kearny Mesa, a large suburban office submarket with a strong pipeline of corporate back-office tenants. Canvas on Chesapeake is comprised of 59,175 square feet and includes a mix of private sector and government agency tenants. JLL Capital Markets served as broker on the Canvas on Willow transaction.
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