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DivcoWest acquires San Diego office for $207m

by Andrea Waitrovich

DivcoWest has acquired the 305,255-square-foot DiamondView East Village office building in downtown San Diego for $207 million, according to local media outlets.

The seller was Cruzan Monroe, which acquired the property in partnership with Cigna Investments in 2012 for $121 million.

DiamondView East Village is a 15-story class A office tower in the East Village neighborhood of downtown San Diego. The property is located adjacent to PETCO Park, home of the San Diego Padres, and is the first class A office tower to be developed as part of a Major League Baseball ballpark.

This is the third big downtown tower deal to close in a span of less than two weeks, according to the San Diego Business Journal. Swift Real Estate Partners acquired Five Thirty B for $57.7 million and Rockwood Capital paid $109.5 million for the office located at 600 B St.

While San Diego County started off with negative space demand for the first half of 2017, the level of negative activity is not indicative of change in the market dynamics, according to Colliers International. Several large blocks will absorb during the second half of the year, such as Illumina in UTC and government offices for the City of San Diego in Downtown.

During the first six months of 2017, demand for class B space (339,128 square feet of positive net absorption) has significantly outpaced the rest of the market (negative 79,324 square feet), according to JLL. Government tenants including the City of San Diego (Downtown) and County of San Diego (Kearny Mesa) have been leading the charge. Healthcare and pharmaceutical companies have also contributed to this trend, including SleepData (Kearny Mesa) and GW Pharmaceuticals (Carlsbad). The affordability factor of class B properties is attractive to tenants who become priced out of class A space.

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