McGrath Family Sells Legacy Asset In San Diego
Sale of 294,428 square-foot retail portfolio in Kearny Mesa represents one of the largest retail sales transactions in the city of San Diego in the past seven years.
San Diego, Calif. – August 11, 2015 – (RealEstateRama) — The McGrath Family, known in San Diego as pioneers in construction and real estate, have announced the sale of a portion of their retail portfolio encompassing 294,428 square feet in the Kearny Mesa submarket of San Diego, California to a commingled fund managed by Clarion Partners, working with existing partner HP Investors, LLC.
The portfolio, which is situated on 29.07 acres and comprised of six single-tenant leased retail properties and one retail strip center, is tenanted with some of the most sought after national retailers in the market, including Wal-Mart, LA Fitness, McDonald’s, Food 4 Less, Starbucks, Verizon, and Chipotle, among others.
“The timing was right for this sale and it worked for us in terms of our long-term goals,” said Laurie McGrath, President of McGrath Development, Inc. “While real estate development has been challenging, fun and certainly rewarding, we have other things that we would like to accomplish. Our larger goal will be growing our Foundation as well as pursuing redevelopment of some of our other properties.”
The McGrath family has owned the land on which the McGrath Retail Portfolio is situated since the late 1940s. In 1990, McGrath broke ground on the development of the McGrath Center, a 50 acre mixed-use project originally approved to include 1,500,000 square feet of office, retail and R & D uses. The plan was later revised to include mostly retail uses and a 100,000 square foot industrial “flex” building.
“My senior management team has been with me from day one,” McGrath explains. “After launching McGrath Development Inc. in 1988, we worked together to visualize the project and bring it to fruition. My father, C.W. McGrath, who is best known for founding one of the largest general engineering contracting firms in the county, completed the grading and infrastructure work for the development, while my team handled the design, construction and marketing of the project.
Laurie continues to spearhead the family’s development and asset management company, which has continued to manage the properties with great care since the project was developed.
Randy LaChance, Senior Vice President, SIOR and Mark Caston, Senior Vice President, both of Voit Real Estate Services, represented the seller, McGrath.
“There is a tremendous pride of ownership that is evident in this portfolio,” said Randy LaChance. “I’ve had the opportunity to work with the McGrath family for 25 years, and I’ve seen the fine quality and attention to detail that they put into their assets.”
LaChance continues, “For prospective buyers, this was a once-in-a-lifetime opportunity to acquire a large retail portfolio in central San Diego. We garnered tremendous interest and activity throughout the sale process, and ultimately identified a buyer that the McGrath family felt would continue the legacy of this special project.”
“This is a core real estate asset in San Diego. It has maintained an occupancy of over 97% since 2001. The portfolio has a great mix of credit tenants from the big box tenants to the in-line space,” added Caston, Voit’s retail leasing expert.
Clarion Partners, a real estate investment manager headquartered in New York, together with San Diego based HP Investors, acquired the retail portfolio for $107.15 million on behalf of one of its commingled funds. The Clarion / HP team represented themselves in the transaction.
“We immediately recognized the rare opportunity that this portfolio presented in this market,” said Sumeet Parekh, a Managing Partner with HP Investors.
Dean Rostovsky, Director with Clarion Partners added, “Retail assets containing this portfolio’s combination of high quality location, tenancy, and scale are quite difficult to acquire, particularly in dynamic metropolitan regions such as San Diego. We are pleased to expand our Western U.S. holdings with this purchase and are confident of continued high occupancy and long-term value growth for these retail properties.”
The portfolio was 100% leased at the time of the acquisition.
The McGrath Retail Portfolio is located along Clairemont Mesa Boulevard and Shawline Drive, just off of Interstate 805.
About Clarion Partners, LLC
Clarion Partners, an SEC registered investment adviser and FINRA member firm, has been a leading U.S. real estate investment manager for 33 years. Headquartered in New York, the firm has offices in Atlanta, Boston, Dallas, London, Los Angeles, São Paulo, Seattle and Washington, DC, as well as a presence in Mexico. With $35.8 billion in total assets under management, Clarion Partners offers a broad range of real estate strategies across the risk/return spectrum to its more than 200 domestic and international institutional investors. More information about the firm is available at www.clarionpartners.com.
About HP Investors
HP Investors, LLC is focused on the investment and development of commercial real estate assets in urban / infill locations on the West Coast. Grounded in research and experienced in the complexities of real estate capital markets, the firm strives to identify long-term risk-adjusted opportunities across retail and mixed-use property types in urban markets along the West Coast. HP Investors is a California-based firm with offices in San Diego and Oakland. For more information, please visit www.hpinvestors.com or email at info (at) hpinvestors (dot) com
About Voit Real Estate Services
Voit is a privately held, debt-free firm that has successfully navigated numerous market cycles since 1971 and currently employs more than 250 people. Voit has owned, developed and managed over 64 million square feet of commercial real estate, participated in $1.4 billion of construction projects and completed over $42.5 billion in brokerage transaction volume. Further information is available at www.voitco.com.
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