San Diego CA— CBRE Group, Inc. announced the sale of Coronado Island Assemblage to local real estate company Kleege Enterprises in Coronado, San Diego, for approximately $22 million. The transaction represented a rare opportunity for the buyer to purchase an entire city block on Coronado Island.
CBRE’s Tim Kuruzar, Ken McLeod and Matthew Perlmutter represented the buyer and seller, a private local family, in this transaction.
Coronado Island Assemblage sits in the center of Coronado Island’s premier dining, nightlife and shopping destination on Orange Avenue and near the Hotel del Coronado. The asset consists of 29,665 square feet of retail buildings, situated on 49,948 square feet of land. Major tenants in the center include Mootime Creamery, Leroy’s Kitchen and Costa Azul. Coronado Island Assemblage, which is comprised of nine parcels that have been assembled over the past forty years, is currently 100% leased to an internet-resistant mix of seasoned tenants, demonstrating strong tenant desire to occupy space in the area.
“Coronado Island is the quintessential Southern California beach town with high barriers to entry. Assemblages with this much upside are increasingly rare. Orange Avenue represents an exceptional opportunity to capitalize on recent market shifts toward hip urban restaurants and shopping,” said Kuruzar. “The short-term lease structure provides an instant “blank canvas” for the new owner to configure the property according to its highest and best use.”
Fundamentals in the San Diego retail market made a strong comeback in the fourth quarter, with 326,663 square feet of positive net absorption. Asking rates continued to climb to $2.26 and the overall vacancy rate tightened, dropping 50 basis points to a post-recession low of 5.2 percent. Overall, the market rebounded positively at the end of last year, with high leasing activity and positive net absorption showing signs of improvement.
“This is a once-in-a-lifetime opportunity for the buyer to acquire such an iconic destination in the heart of Coronado’s downtown retail district,” said McLeod. ”New tenant demand makes this a true value-add opportunity for the astute investor.”