In a notable diversion from the prevalent trend of converting commercial spaces to residential units, the Hazard Center complex in San Diego's Mission Valley has escaped the wrecking ball. According to NBC San Diego, the complex was recently sold for $68.25 million to BH Properties, signaling a different trajectory for the landmark property.
Despite the pressure many commercial properties face from the widespread adoption of work-from-home and flexible work policies, Hazard Center is charting a course for upscale retail revitalization rather than being transformed into housing. This fate seemed in store with the previous ownership. In a recent transaction, BH Properties, which now owns the site, purchased the 14.5-acre mixed-used campus with a notable 15-story office tower and a sizable retail footprint. As revealed by BH Properties, the newly acquired campus joins BH's other strategic purchases, including assets in Seattle and San Francisco.
Speaking to the plans for Hazard Center, John Jennings, a real estate advisor with Newmark, conveyed his initial disappointment when the prior owners shelved the residential redevelopment plans. Nonetheless, as per NBC San Diego, Jennings expressed enthusiasm about representing BH Properties in their endeavor to transform Hazard Center into a "first-class lifestyle-oriented shopping center" and fulfill its potential.
Economically, BH Properties' acquisition marks a loss for the previous owner, who reportedly purchased the complex in September 2003 for a sum north of $100.06 million, according to the San Diego County Assessor's Office. The sale, which closed last week, has BH Properties purchasing three parcels for significantly less than what was paid two decades prior. As per BH, the office tower, part of the complex, boasts a 77% occupancy rate with long-tenured tenants.
On the investment front, the purchase of Hazard Center resonates with BH Properties' strategic growth plan. "We have had San Diego County on our list of preferred markets for quite some time," said Jim Brooks, as detailed by BH Properties, explaining San Diego's alignment with the company's investment criteria. This acquisition will expand BH's footprint in California and in regions where the company recently established a presence.
D. Michael Van Konynenburg, President of Eastdil Secured, underscored the desirability of such mixed-use assets in San Diego's robust market, as quoted in BH Properties' press release. Eastdil Secured, the global real estate investment bank advising the seller, has collaborated with BH Properties to execute over $580 million in transactions, about half of which occurred within the last 18 months.
