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Kearny begins work on development within Otay Crossings Commerce Park

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Kearny Real Estate begins construction on a two-building industrial complex

Kearny Real Estate began construction Monday on a two-building industrial complex within the Otay Crossings Commerce Park in Otay Mesa.

The build-to-suit buildings are being constructed for Boston-based Cabot Properties, according to Collier International, which will be handling the leasing. The complex is being developed between where Amazon is building a 3.3 million-square-foot fulfillment center and the planned Otay Mesa II Port of Entry.

The buildings are slated for completion in the fall of 2021.

Building A will be 72,028 square feet in size and feature 32-foot clear heights, 26 dock-high loading doors, two ground-level loading doors with ramps, and 91 parking stalls. Building B will be 79,395 square feet total and feature 32-foot clear heights, 86 dock-high loading doors, 2 ground-level loading doors with ramps, and 97 parking stalls.

Jeffrey Givens, a Kearny Real Estate partner who works out of the San Diego office, said his firm, in conjunction with Pacific Coast Capital Partners (PCCP) are providing financing for the project.

The Colliers team of Mark Lewkowitz, Chris Holder and Will Holder will handle the leasing for the properties, which are currently available for future use.

"Despite uncertain market conditions due to COVID-19, San Diego's industrial market remains strong with continued demand from cross-border related tenants," Lewkowitz said. "These two new buildings -- featuring superior clear heights, contemporary design and modern amenities -- are ideally designed for a variety of tenants ranging from manufacturing to distribution and logistics, among others. We believe the project is very well situated, immediately adjacent to the new SR-11 border crossing and the new Amazon Fulfillment Center."

While ideally it would be preferable to have a single tenant take both buildings, Givens said they could be divisible to allow as many as six tenants. He said three or four tenants is more likely.

"We are proud to bring two high-quality industrial buildings within the Otay Crossings Commerce Park," said Justin Harvey, Cabot Properties' managing director of investments for the West region, in a statement "With its proximity to the U.S.-Mexico border and connections to San Diego, Los Angeles and beyond, Otay Mesa continues be an ideal location for new development."

Givens said the Amazon Fulfillment Center will be a game changer.

"It certainly puts Otay Mesa on the map," he said.

Givens, whose business park is less than a quarter of the mile from the huge building, said from what he has seen of the construction, he would expect that facility to be up and running before next year's holiday season.

As for Otay Crossings, the original 300 acres has dwindled significantly. Some of that land was sold to Caltrans for the planned Otay Mesa II Port of Entry, and the State Route 11 Toll Road that will lead up to the crossing.

"We also sold land to the county for its Emergency Vehicle Operations Center," Givens said. "This was a couple of buildings and what amounts to a race course."

Kearny Real Estate has an approved tentative map for 59 industrial lots. The Los Angeles developer also has acquired an additional 229 acres for offsite mitigation. The initial lots have been completed, and more are slated to come on board in the first quarter of next year.

Givens explained that it is difficult to tell what the overall square footage will be for the project because a lot of it will be used for the outdoor storage of equipment and trailers.

Givens said that 16 acres has been sold for a build-to-suit for McKinney Trailer Rentals.

Givens said if demand continues at its present pace, Otay Crossings could be built out by the end of 2022.

By Thor Kamban Biberman
thor_biberman@sdtranscript.com


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