First Interstate Plaza Purchased at Record Price

First Interstate Plaza was sold Wednesday for $110 million, a price described as the highest ever paid for a single building in San Diego County.

Equitable Real Estate Investment Management’s Prime Property Fund bought the 23-story, 600,000-square-foot building at 4th Avenue and B Street from a partnership consisting of Newport Beach-based Koll Co. and Beta West Properties, a wholly owned subsidiary of Denver-based U.S. West Inc.

First Interstate Plaza, which was built by Bowlen Holdings for $83 million, opened in December, 1984.

“I’d have to believe that it’s the largest amount ever paid for a single building in the county,” said Sanford Goodkin, a longtime figure on the San Diego real estate scene. “It’s certainly one of the largest (county) real estate transactions ever.”

The $110-million price “represents quite a nifty turnaround” for Koll and Beta West, according to one local commercial real estate broker familiar with the deal. “I’d say it’s a good price, though, because it is 85% leased, and it’s in a great location.”

The building’s tenants include First Interstate Bank; the law firm of Gray Cary Ames & Frye, which occupies 100,000 square feet; Touche Ross, an accounting firm, and financial firms Smith Barney Harris Upham & Co. and Shearson Lehman Brothers.

Prime Property Fund also owns Fashion Valley Mall, a 1.4-million-square-foot shopping center in Mission Valley; First National Bank building, a 27-story, 536,000-square-foot office building in downtown San Diego, and the Sheraton Grande and Sheraton Harbor Island hotels on Harbor Island.

First Interstate Plaza is a six-sided, carmine-red granite building. Gray Cary Aimes & Frye became the building’s chief tenant when it occupied six floors of the building shortly after it was completed in late 1984.

The building “fits our strategy of acquiring major properties with strong income streams,” according to Harry D. Pierandri, the portfolio manager for Equitable’s Prime Property Fund. Prime Property Fund, with 250 pension fund clients, has made equity investments in about 250 commercial properties around the country, according to Pierandri.

The Koll Co. will continue to manage and lease the property for Equitable Real Estate.