San Diego Business Journal

Downtown Block Sold for $13M

By Lou Hirsh Wednesday, June 6, 2012

An eight-property portfolio of distressed assets in downtown San Diego, known as The Waterfall Block, has been sold for approximately $13 million.

The deal included retail, office and mixed-use commercial properties totaling 58,288 square feet, sold following short-sale negotiations with three lenders, according to a June 4 statement from Marcus & Millichap Real Estate Investment Services.

The brokerage firm represented the seller, Waterfall Block LLC, and the buyer, Elajou Group LLC, which purchased the properties in a joint venture with Starwood Capital Group.

Ben Tashakorian, a vice president of investments in the San Diego office of Marcus & Millichap, said the prior owner had planned to redevelop the downtown site and acquired the properties over the course of three years, with the final property purchased in 2009 for approximately $33 million.

“The economic downturn significantly decreased the properties’ overall value, and extenuating circumstances created a situation in which it was beneficial for all parties involved to minimize further losses,” Tashakorian said.

The Waterfall Block is bordered by Seventh Avenue, Eighth Avenue, Broadway and C Street.