Manchester Financial Group Lands $212M for Navy HQ
Manchester Financial Group LP, of San Diego, has received a $212 million term loan facility provided by funds managed by Brevet Capital, of New York. The loan proceeds were used to finance the development and construction costs of the U.S. Navy’s Region Southwest Headquarters in San Diego, which the Navy is moving into this month.
The headquarters is in turn part of Manchester Pacific Gateway, a 3 million-square-foot, 14-acre mixed-use development with office, hotel and retail space on the San Diego waterfront and port district.
Completed at the end of September, the Navy regional headquarters is a 17-story, 373,000-square-foot Class A office that will accommodate 1,700 Navy and civilian employees. The project replaces a 1920s-vintage headquarters building that will be demolished starting next January.
Brevet is a specialty finance provider that focuses on the government sector. A Manchester spokesperson did not reply to Commercial Property Executive’s request for additional information.
Life sciences stays healthy
Also in late September, IQHQ acquired from Manchester five of the project’s seven blocks, on which IQHQ will develop the $1.5 billion San Diego Research and Development District, a life sciences campus that will include retail space and a museum. The blocks that Manchester is retaining feature a 1,035-key waterfront hotel and 1.9-acre plaza.
Manchester Pacific Gateway’s development manager is Dealy Development, the architect is Gensler, the civil engineer is Design Consultants, the general contractor is Turner Construction, and the landscape architect is KTU&A Landscape.
San Diego is the nation’s third-largest life sciences market, with a metro-wide inventory estimated at 19.0 million square feet, according to a June report from NGKF. And so far, it has been resilient to the effects of the pandemic: 95 percent-plus of rents were collected as of April, with lease rates and concessions on new leases remaining unchanged.
One new evolution in the market, NGKF says, is that “several new landlords have emerged with recent acquisitions of flex parks that they will re-purpose to traditional life science space.”
The average overall vacancy is about 7.1 percent, and about 13.4 percent if the transitional new developments are included, also according to NGKF.