Goldman Sachs Provides $82M Refi for Renovated San Diego Office Complex
Sponsors of the Sunroad Centrum office building hope its financial health will spur development of the larger Centrumplace project
By Brian Pascus May 21, 2024 12:40 pm
reprints
The centerpiece of a San Diego master plan is on healthier financing footing.
Sunroad Enterprises has secured $82.46 million to refinance Sunroad Centrum I, its 11-story, Class A office tower in central San Diego. The 275,000-square-foot building stands at the centerpiece of Sunroad Enterprises’ plan to develop Centrumplace, a multi-asset, mixed-use office complex that has been stalled for seven years.
Goldman Sachs (GS) provided the financing, a five-year, fixed-rate senior loan. The $82.46 million loan replaces a $77.5 million CMBS loan originated in 2016 by Wells Fargo and Cantor Commercial Real Estate that was due to expire in August. The JLL Capital Markets debt team of Aldon Cole, Tim Wright and Bharat Madan arranged the financing on behalf of the sponsor.
“The fact we were able to get the building fully leased and refinanced is a testament to the location, amenities and teamwork of our brokers, designers, architects and capital markets team,” said Dan Feldman, president of Sunroad Enterprises, in a statement. “The fact that Goldman Sachs was the finance partner speaks to the financial strength of the tenant roll and Sunroad’s ownership.”
Located at 8620 Spectrum Center Boulevard, Sunroad Centrum I was built in 2008 and spans nearly 1.5 acres. It includes floorplates exceeding 59,500 square feet and has nearly 1,100 on-site parking spaces on-site.
Sunroad Centrum I has had to reinvent itself on the fly since losing its sole tenant, Bridgepoint Enterprises, in 2020, while simultaneously fighting through the worst office leasing environment in a generation. Sunroad Enterprises has invested $30 million in tenant improvements into the building over the last four years, and today boasts 100 percent leasing with tenants such as Berkshire Hathaway, Kyocera, California Veterans Administration and several departments of California’s state government. The building also serves as the corporate headquarters for Sunroad Enterprises, a longtime player in the San Diego automotive and real estate spaces.
“Although the market, both from a leasing and financing perspective are challenged, Sunroad Centrum was 100 percent re-leased and refinanced during this period,” said Feldman. “We are extremely proud of this successful execution.”
The building sits alongside Highway 163 and is near Interstate 805 and Interstate 8. There is also the attraction derived from the bustling Kearny Mesa submarket, home to nearly 3,000 people and only 22 minutes from San Diego International Airport.
Moreover, the Sunroad Centrum I office property is part of the broader mixed-use redevelopment plan called Centrumplace, or the “Sunroad Centrum Master Plan,” which has been in the works since 2016. Centrumplace aims to build two additional office buildings (totaling more than 583,000 square feet combined), 1,245 rental apartments, several swimming pools and fitness centers, and a 2-acre park on the site of Sunroad Centrum I.
“Centrum exemplifies what success means for the new era of office,” said JLL’s Cole. “A central location, Class A improvements and amenity packages, including quality on-site and walkable food offerings, a public park and several Class A multihousing projects developed by Sunroad all contribute to a cohesive sense of place.”
Brian Pascus can be reached at bpascus@commercialobserver.com
