The Opportunity

MCC and Blackstone Real Estate Advisors acquired StoneCrest in December 1995.  The project included 215,000 square feet of existing Class A office space within a 26 acre office campus in the San Diego suburb of Kearny Mesa.  The property was approximately 78% leased with the opportunity to seek additional office entitlements through a re-entitlement process with the city of San Diego.  The property was purchased for approximately $19 million.

During 1997, MCC completed the lease-up of the existing buildings and successfully received entitlements for an additional 250,000 square feet of office and R&D space.  In 1998, MCC broke ground on the first 110,000 square foot office building.  In August of that year, the entire project was sold for $43 million.

Performance Highlights

  • Obtained entitlements for an additional 250,000 square feet of office/R&D space
  • Leased 100,000 square feet to bring occupancy to 100%.
  • Completed new construction of 110,000 square feet.
  • Returned total cash gains of $16 million in 34 months.
  • Deal IRR of 65%.

Current Status

  • Property was sold in August 1998.