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BIXBY TURNS FBI BUILDING INTO CREATIVE OFFICE SPOT

San Diego Union Tribune

By Roger Showley

The former FBI building in Kearny Mesa is graduating to a creative office use serving college-bound student programs following a nearly $5 million renovation and $30.1 million purchase.

AVID Center, a 37-year-old San Diego nonprofit that helps prepare students for higher education, recently bought the 92,463-square-foot Aero Building at 9797 Aero Drive in Kearny Mesa from Bixby Land. Hughes Marino represented the buyer and Cushman & Wakefield represented the seller.

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The Aero Building was renovated from FBI to multitenant use before AVID Center bought it from Bixby Land. One of the new features is outdoor furnishings and landscaping. (CoStar Group)

“Given how long we’ve been here and how long we plan to be here, it made financial sense if we could find the right opportunity and the right property to own than continue to rent,” said Steve Silberman, executive vice president of the organization, whose acronym stands for Advancement Via Individual Determination.

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Part of the ground floor was converted to a gym for building tenants. (CoStar Group)

AVID, started by a Clairemont High School teacher in 1980, helps students navigate the complex preparation, application and retention process to attend and succeed in college. It now serves about 60,000 teachers annually from 5,000 schools in 1,000 districts with some 1.5 million students benefiting.

A key program offers a series of summer institutes where teachers receive training on prepping their students for college. San Diego will host two institutes June 28-30 and Aug. 1-3. Other teachers learn how to motivate elementary and middle school students and help freshmen succeed once they’re in college.

The firm employs 230 with more than half in San Diego and the remainder in Denver, Florida and Texas. The building has several other tenants in place but AVID could eventually take over those spaces as it grows. AVID is scheduled to move in around June 1 from its location on Lightwave Avenue at the former General Dynamics missile plant off state Route 163, south of Clairemont Mesa Boulevard.

AVID could have bought the building and taken on the renovations itself — CoStar Group said Bixby paid $12.1 million in 2016 — but Silberman said AVID wasn’t equipped to handle the challenge of renovation. He also said building its own headquarters from the ground up also was not within the staff’s expertise.

“It’s a lot easier to move into a building that’s been newly renovated and that has tenants in it,” he said.

Darrel Fullbright, the project manager for Gensler architecture, said the roughly eight-month renovation process included demolishing the FBI’s interior improvements, converting the ground-floor parking into leaseable space, installing new landscaping and outdoor patios and furniture, and setting up a small gym with showers for tenants. The exterior was updated with new finishes and highlights.

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A two-story entry area was carved out of the building as part of $5 million in renovations. (CoStar Group)

“The biggest way to make an impact was to paint it a dark, charcoal color,” Fullbright said.

One other big change was to raze a vehicle maintenance building and turn the site into parking for about 30 cars.

Aaron Hill, Bixby’s chief operating officer, said the company originally planned to lease up the building and then sell it at higher value, if not retain it as a long-term asset.

“In this case where we had an owner-user, we couldn’t pass up the opportunity,” he said.

To call the project a “creative office” might be a bit of a stretch, he said, since that term often applies to old industrial buildings and factories that startups and tech companies find “cool.” But taking a special-purpose building for the FBI and making it functional for a completely different does require some creative thinking.

For example, he said, the building was built to suit the FBI’s low-profile approach.

“They were not trying to draw attention to themselves,” he said. “Tenants want to have an image, a brand, and be able to show employees and clients the place they have for a headquarters resonates in a positive way.”

Solutions included creating a two-floor entry lobby that would welcome visitors. Of course, the gun and weapons vaults and special purpose rooms for holding suspects and interviewing witnesses were toast.

“We didn’t think future tenants would need that,” he said

Derek Hulse, who represented Bixby in buying, re-tenanting and selling the Aero Building, said its reuse as a multi-tenant office building represents the evolution going on in Kearny Mesa and other industrial and low-rise office building markets in the county.

“You see a repositioning of all offices in office markets,” he said.

It started with Sorrento Valley and the rise of high-tech companies that sought inspiring spaces with plenty of natural light and open floor plans, plus ping-pong tables and dog-friendly policies. Now lawyers, accountants, and government agencies all want similar work spaces for incoming younger workers — though dogs and ping-pong may not be make on the final punch list.

“Today’s tenant is seeking a unique, modern office environment, no matter what the submarket is,” Hulse said.

Tenants are paying top rent for these buildings, particularly when they are in well-situated places easily accessible for employees and clients.

Hughes Marino’s John Jarvis, who represented AVID, said the nonprofit was taking more space than it needed but will benefit from the rents paid by two existing tenants and several more that might occupy 6,500 square feet of unneeded space — and not have to worry, at least for the near term, about outgrowing the building.

As for Kearny Mesa, Jarvis said it appeals to many tenants who want to be freeway-close but not stuck in rush-hour congestion between University City and Sorrento Valley.

“I think Kearny Mesa is a fantastic market,” he said. “I wish there were 10 more buildings like this. It’s the geographic center of the county.”