Prime Mixed-Use Investment For Sale in San Diego – 7.25% Cap

6172-6196_University Ave, San Diego

Table of Contents

$6.0M
Asking Price
30
Revenue Units
94%
Current Occupancy
7.25%
In-Place Cap Rate
Investment Overview

A Rare Stabilized Asset in a Thriving San Diego Submarket

Finding a stabilized, diversified, and newly renovated commercial asset in a thriving Southern California submarket is rare. This in-depth guide covers the property's financials, market positioning, and operational insights to help investors make an informed decision.

Located on a highly visible, signalized corner at University Avenue and College Avenue, this expansive 20,934 SF mixed-use property sits on a 0.82-acre, three-parcel site. With a 94% occupancy rate and zero deferred maintenance thanks to extensive 2024–2025 capital improvements, it offers robust in-place cash flow, immediate upside, and long-term redevelopment potential.

The property's position within the College Area corridor — just 0.6 miles from San Diego State University — anchors it within one of the city's most consistent demand zones. Year-round student and faculty traffic, paired with neighborhood service tenants, keeps both retail and small-bay industrial space in steady use.

Financial Performance

Secure In-Place Yield With a Clear Path to Stronger Returns

Priced at $6,000,000, this asset provides a high in-place yield with embedded upside through staggered lease rollover and below-market legacy leases.

In-Place Cap Rate
7.25%
Strong stabilized yield in a submarket where comparable assets typically trade between 5.5% and 6.5%.
Proforma Cap Rate
8.29%
Achievable through scheduled lease rollover at current market rates and embedded annual escalations.
Projected Proforma NOI
$497K+
Driven by 2025 leases at market plus 3% annual escalations across multiple tenants.
Lease Rollover & Upside

Staggered Expirations Build Long-Term Value

Recent 2025 lease activity confirms strong market demand at current rents, with multiple tenants on 3- and 5-year terms featuring 3% embedded annual escalations.

Tenant Category Key Leases Lease Expiration Upside Potential
Retail (Legacy) FuelThyCells 2029 Mark-to-market upon rollover
Retail (Legacy) Halal Market 2033 Long-term stability with embedded bumps
New 2025 Leases 6 Suites 2028–2030 Immediate NOI boost at current market rates
Industrial / Workshops 17 Units Staggered Short-to-mid-term rollover for rapid market adjustments
Tenant Mix & Diversification

30 Revenue Units Insulating Against Single-Tenant Risk

Four tenant categories spread risk across the asset. If one tenant vacates, the impact on monthly revenue stays minimal.

9
Retail Suites

High-visibility frontage along the University Avenue corridor.

3
Dock-High Bays

Warehouse space essential for local logistics and distribution.

17
Industrial Workshops

Small-bay spaces in high demand from local trades and fabricators.

1
Residential Apartment

3-bedroom, 1,076 SF unit above the 6196 retail wing for supplemental income.

Capital Improvements

2024–2025 Renovations Eliminated Near-Term CapEx Concerns

Current ownership reinvested heavily in the property — completely overhauling the 6192–6196 wing and modernizing infrastructure across all units.

Fire & Safety

New sprinkler system installed across all retail and warehouse units.

Avoids massive fire-code modernization costs and lowers insurance premiums.

Accessibility (ADA)

Three new ADA restrooms, accessible paths, ramps, and door hardware.

Prevents litigation risk and saves hundreds of thousands in retrofit costs.

MEP Systems

Full HVAC, plumbing, and electrical replacement to NEC standard panels.

Boosts utility infrastructure capacity and minimizes emergency repair costs.

Environmental & Water

Stormwater BMPs, backflow preventer, and commercial grease interceptor.

Allows immediate leasing to high-demand restaurant and food operators.

Market Analysis

Why Small-Bay Industrial Remains Attractive in San Diego

San Diego is experiencing severe Mid-City industrial-flex scarcity. Large distribution centers dominate the outskirts, but local plumbers, electricians, e-commerce micro-fulfillment operators, and fabricators need central access. This property's 17 small-bay workshops and 3 dock-high bays serve a permanently captive market that larger institutional developments routinely overlook.

The University Avenue corridor itself is a vital 5-mile commercial artery with average asking NNN rents ranging from $28 to $38 per square foot — leaving meaningful room for growth above the property's in-place levels.

Most legacy buildings in San Diego suffer from severe parking shortages. This property's 28 dedicated surface spaces, with dual access from University Ave and Cartagena, is a competitive advantage. Located in a Transit Priority Area near MTS bus lines and the College trolley station, the site benefits from high foot traffic and aligns with future higher-density redevelopment initiatives.

Just 0.6 miles west of San Diego State University, the property captures economic spillover from 37,000+ students and faculty — driving year-round demand for food, services, and small-business spaces.

Due Diligence

What Buyers Should Verify Before Closing

Older mixed-use assets reward thorough underwriting. The 2024–2025 renovations remove most legacy concerns, but a complete checklist still matters.

Buyer Due Diligence

  • Review trailing 12-month (T12) P&L statements
  • Analyze all legacy and newly executed 2025 leases
  • Verify utility sub-metering configurations
  • Confirm zoning allowances under CC-4-3 / RS-1-7
  • Review Phase I Environmental Site Assessment (ESA)

Property Tour Checklist

  • Inspect new fire-rated demising walls in suites 6192–6196
  • Check dual access points for retail vs. warehouse traffic
  • Review placement and capacity of the new grease interceptor
  • Evaluate parking lot ingress and egress at peak hours
  • Walk the 3-bedroom apartment to assess finish levels

Mixed-Use Acquisition Checklist

  • Confirm lender requirements for residential vs. commercial income ratios
  • Finalize 1031 exchange timelines with a Qualified Intermediary (QI)
  • Assess local property management fees for multi-tenant assets
  • Review tenant estoppel certificates prior to closing

Risks & Operational Considerations

  • Active management is key with 30 diverse tenants — swift response times maintain occupancy
  • Property sits in the Central Urbanized Planned District with CC-4-3 / RS-1-7 zoning
  • Long-term play includes higher-density residential or mixed-use redevelopment
  • TPA designation supports future density bonuses and parking waivers

For More Information

Erik Egelko

Phone
(619) 616-7332
Email
erik@palmtreeproperties.com
Professional Licenses
DRE#: 01984056
NMLS#: 2543934

FAQ

What is a mixed-use commercial property?

A mixed-use property combines multiple types of real estate — such as retail, industrial, and residential — into a single project or building, diversifying the investor’s income streams.

In San Diego’s competitive market, a stabilized asset trading between a 5.5% to 6.5% cap rate is common. An in-place cap rate of 7.25% (with a proforma of 8.29%) is considered exceptionally strong for this submarket.

Zoning like CC-4-3 accommodates high-intensity, pedestrian-oriented retail, and residential uses. Being in a Transit Priority Area often grants developers waivers on parking requirements and density bonuses for future builds.

A mix of 30 units across retail, industrial, and residential means that if one tenant vacates, the impact on total monthly revenue is minimal — providing highly insulated, recession-resistant cash flow.

Investors should scrutinize big-ticket items: roof age, HVAC systems, plumbing, electrical capacity, fire safety compliance, and ADA accessibility.

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