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Cross-Border Airport Facility Eyes Expansion

Developers of CBX Acquire Nearby Land in Otay Mesa
November 29, 2017
Operators of the Cross Border Xpress (CBX), a busy passenger bridge and terminal connecting travelers to the Tijuana airport from Southern San Diego County, are setting the stage for expected future expansion following the purchase of 49.4 acres at 8381 Siempre Viva Rd. in Otay Mesa for $4.8 million.

Brokers and CBX operators said the acquisition will allow the facility to expand parking in the short run, but long-term plans envision significant new commercial development on adjacent land to serve travelers in the coming years, including a retail component, restaurants and hotels.

The land is located just north of the international border with Mexico, on La Media Road - a major truck route into Mexico, according to Rob Hixson, senior vice president of CBRE Group, Inc. in San Diego, who represented the buyer, Otay Tijuana Venture LLC, which operates CBX. The sellers, the Hagey family, represented themselves in the sale.

Please see CoStar COMPS #4064835 for additional information on this transaction.
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"This was a significant sale because this gives Otay Tijuana Venture control of the land between La Media Road and the CBX," said Hixson, who has been working in the Otay Mesa area for more than 32 years.

Hixson noted that the acquisition also assures limited competition from other potential commercial users for the border-adjacent land in southern San Diego County. This is the CBX development group's fourth land purchase in this area that the brokerage firm has assisted with in the past nine years.

The privately-built, $120 million CBX opened in late 2015 and was developed by Otay Tijuana Venture LLC, a cross-border partnership whose backers include Chicago-based Equity Group Investments, founded by billionaire Sam Zell.

Located at 2745 Otay Pacific Dr. in Otay Mesa, the enclosed, cross-border pedestrian bridge and terminal is accessible only to ticketed air travelers taking flights out of Tijuana International Airport. Its on-site facilities, including ticketing, retail, customs and other security services, served more than 1.3 million passengers in 2016.

With usage growing well ahead of original expectations - thanks in part to post-recession improvements in the economies of both California and Mexico - operators said CBX is on track to handle a projected 1.8 million passengers in 2017 and a projected 2.3 million in 2018.

Travelers must purchase separate tickets in advance to use the bridge. Tickets currently cost $16 for a one-way trip and $29 for a round trip.

CBX operators estimate the facility currently handles around 4,000 passengers per day, the bulk of them from cities throughout California, but the number is typically higher during holidays and other peak periods. Officials are in the process of adding to the facility's original 1,200 parking spaces, and have been working with the city of San Diego on long-term plans to add other travel-related services.

Barring unforeseen events that could disrupt cross-border travel flow, the growing traffic into the facility is eventually expected to attract operators of visitor service retail stores, restaurants and hotels, similar to the types of development often seen around municipal and international airports.

Some new facilities could sprout on the existing 55-acre property where the 23-acre CBX currently sits, while others could occupy the nearby land recently acquired by the facility's operators. However, no specific plans for the property had been presented to the city as of late November.

"Since the opening of the Cross Border Xpress in 2015, we have experienced steadily increasing demand for our pedestrian bridge border crossing that directly connects San Diego and the Tijuana International Airport, and we see a very bright outlook for our facilities and this region," CBX spokesperson Stephanie Saathoff told CoStar News.

"Otay Tijuana Venture LLC recently acquired additional property in Otay Mesa to give us the potential for future business opportunities in this thriving area," Saathoff added. "While we have no specific plans for CBX expansion or other projects at this time, we look forward to participating in the continued economic growth and job creation in Otay Mesa."

Lou Hirsh, San Diego Market Reporter  CoStar Group   
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