DiamondView office tower sells for $207M

DiamondView East Village, the 15-story office tower adjacent to Petco Park, has been sold for $207 million in what may be a record price per square foot in the county.

Dennis Cruzan, whose company Cruzan bought the 305,255-square-foot building with CIGNA for $121 million in 2012, said the buyer was Divco West Real Estate Services, a private real estate investment firm based in Boston and San Francisco.

The sale price works out to $661 per square foot, which Cruzan thought might set a record for high-rise office towers in the county.

DivcoWest previously owned Genesee Executive Plaza, a 158,341-square-foot office and medical office project near Westfield UTC.

On it website, Divco West said it has purchased more than 30 million square feet of commercial space across the country and currently manages more than $2.5 billion in equity that includes commercial and residential properties.

The purchase came through DivcoWest’s $1.5 billion Fund V involving more than 40 institutional investors. Future properties targeted for purchase include office and research-and-development projects primarily in Southern California and the San Francisco Bay area, plus Boston, New York, Washington, D.C., Seattle and Austin, Texas — areas the company characterized as strong in “education, employment, amenities and transportation systems with high barriers to entry.”

Developed by Cisterra Partners, designed by Carrier Johnson + Culture and built by Reno Contracting in 2007 at 350 10th Ave., DiamondView is just east of Petco Park and has a vacancy rate of less than 10 percent, Cruzan said. The sale closed last week.

“When we bought the building, we thought that East Village was going to be something special, which all agree it has (become),” Cruzan said.

With asking monthly rents starting near $5 per square foot, Cruzan said the building attracted interest nationally because of its location near apartments favored by millennials and a tenant makeup of tech and creative companies.

Amenities include a 35,000-square-fit gym, ground-floor retail and a top-floor “skybox” open air sitting area of the Petco Park baseball field.

Cruzan said he has no immediate plans for reinvesting the proceeds into a new project. But he said the sale may prompt developers and lenders to greenlight a new office tower downtown.

CoStar said the record purchase price locally was the 623,000-square-foot One America Plaza at 600 W. Broadway for $300 million or $482 per square foot in 2006.

The second highest was $210 million in 2007 for 396,405-square-foot First Allied Plaza at 655 W. Broadway — or $530 per square foot.

However, commercial real estate prices tumbled soon after in the real estate downturn, and First Allied Plaza resold for $66 million in 2015. One America Plaza has not been resold by its 2006 buyer, the Irvine Company.

roger.showley@sduniontribune.com; (619) 293-1286; Twitter: @rogershowley

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