Sudberry lands $81.6M construction loan for Otay River Park

JLL Capital Markets has arranged $81.6 million in financing for Otay River Business Park, a 369,803-square-foot industrial and retail park in Chula Vista, California, according to Institutional Real Estate, Inc. The floating-rate, five-year loan comes from a debt fund and was placed for borrower Sudberry Properties, a San Diego-based real estate development and asset management firm. IREI reports the facility includes future funding for construction completion and leasing costs.

The park, located east of Interstate 5 in Chula Vista, has been developed in multiple phases built between 2021 and 2026. Its existing space is 100 percent leased across a mix of industrial, distribution and retail users. Phase IV, currently under construction, includes a 66,000-square-foot industrial building and parking facilities, and is already 70 percent pre-leased to an investment-grade tenant.

The structure matters more than the headline: a five-year floating-rate loan is a short runway for a property still finishing construction. The terms suggest the lender is financing the distance to stabilization, then expecting a take-out financing once the project is complete and the remaining leasing costs are spent. On a park where the existing square footage is fully occupied and the un-built building is largely pre-leased, that is a manageable risk outline. The construction-completion risk is concentrated in a single building with an investment-grade user already committed.

For sponsors and lenders tracking real estate debt, this deal shows what construction-stage lending currently requires: pre-leasing that removes the lease-up question before the first dollar of future funding is advanced. This is not speculative construction financing; it is a bridge from the last stretch of construction into a stabilized income property. The fact that a debt fund would write floating-rate money on those terms suggests the lender is comfortable pricing the refinancing risk at maturity, and far less comfortable carrying the leasing risk in the meantime.