Dealmaker: MetroGroup Realty Finance Secures $34M in San Diego

MetroGroup Realty Finance, Newport Beach, Calif., secured $34.3 million for Klein Investment Family Limited Partnership to acquire a 132,700-square-foot, four-building office/flex campus in San Diego, Calif.

Aerospace and defense technology company Cobham Advanced Electronic Solutions occupies the entire campus on Chesapeake Drive and Roscoe Court in the city’s Kearney Mesa submarket. 

“San Diego is one of the most dynamic markets in the country and is internationally recognized as a leader in aerospace and defense,” said MetroGroup Realty Finance Founder Patrick Ward. “The continued growth in these industries, coupled with the region’s record low vacancy, is driving tremendous investor demand to the area.”

Ward noted that many investors seek high-quality stabilized investments in San Diego, which he called well positioned for long-term growth “and more likely to sustain economic shifts than secondary and tertiary markets.”

Klein’s acquisition will complete an IRS 1031 tax deferred reverse exchange, Ward said.

MetroGroup provided a seven-year, $27.3 million permanent loan and a one-year, $7 million bridge loan to Klein. “We took a unique approach to securing financing for this acquisition and recommended combining a bridge and permanent loan,” Ward said. “The bridge loan will provide temporary liquidity in anticipation of their selling an existing property. Proceeds from the sale of their existing property will retire the bridge loan and complete the reverse exchange.” 

Klein plans several capital improvements including replacing the properties’ roofing and HVAC units and upgrading electrical power and fire systems.