Hotel Durant Acquired by Gemstone Hotels & Resorts in $27M Deal

By Alex Girda, Associate Editor

Berkeley’s Hotel Durant was the object of Gemstone Hotels & Resorts’ latest move on the hospitality market. The company, a full-service hotel management entity, acquired the property for a reported total of $27.3 million.

Gemstone is a hospitality company based in Park City, Utah that specializes in owning and operating urban upscale assets and chose the San Francisco Bay Area’s hospitality market for its current track record. The area has seen its hospitality figures increase in recent years, spurring a number of hotel deals.

The 144-key hotel is located at 2600 Durant Dr. in the immediate proximity of the University of California–Berkeley campus. The boutique hotel offers a great location within walking distance of Cal Bears Stadium and the Lawrence Hall of Science. The in-room amenities include high thread-count linens, hypo-allergenic pillows, ceiling fans, black-out shades, iPod docking stations, organic robes and laptop safes.

Additionally, graduate floor rooms benefit from a concierge-style service with daily complimentary breakfast servings and wine hour events. The on-site dining option is Harry’s, the hotel’s signature restaurant, with breakfast, lunch and dinner menus, craft-brewed beer, and California wines. The investment is seen by Thomas Prins, Gemstone principal, as “a great way to start the new year.”

“When this hotel became available, we knew it was perfect for Gemstone,” the official stated. The company was reportedly convinced by the fact that the Durant has its own niche market in Berkeley, making it a good addition to the company’s existing assets. Gemstone’s current portfolio also includes venues such as Maison 140 in Beverly Hills, the Mosaic in Los Angeles, the Copley Square Hotel in Boston and The Carlton in New York.

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Boston Properties Acquires In-Development High-Rise in South Financial Submarket, Sets Sights on Mixed-Use Opportunity in Virginia

By Alex Girda, Associate Editor

Another major San Francisco office project is the object of a large commercial real estate transaction, after Boston Properties recently announced the purchase of 535 Mission Street. The project, located in the city’s South Financial submarket, was previously owned by Beacon Capital Partners. The company is set to revive the development process halted back in 2008, as construction is set to re-commence by the end of the month.

The overall cost of the acquisition is clocked in at around $71 million, with Boston Properties now owning not only the development site, but all materials purchased up to the point of the deal and the existing construction at the site.

535 Mission Street is a project for a 27-story building with a massive height of 378 feet. The building will offer 307,000 square feet of leasable Class A office and retail space in a LEED Gold certified environment. The property is set to cater to tech tenants looking to relocate or expand in the booming tech-oriented office market of the San Francisco Bay Area.

Design-wise, the building will feature a glass front, column-free floor plates, and will offer residents views of San Francisco and the neighboring bay. The development process could take the company’s overall investment in the office property to around $215 million, a recently issued company statement shows. A completion date is set for the fall of 2014.

Apart from being the new owner of the in-development office project at 535 Mission Street, Boston Properties has also secured the last available land parcel at the Reston Town Center. The company shelled out approximately $27 million for the property, which is currently zoned for a possible development of 250,000 square feet of office space. Boston reportedly has its sights set for a mixed-use development that could see a residential component take shape at the Reston Town Center.

For more market data from the San Francisco Bay Area, click here.

Image courtesy of Google Maps

San Jose Power Retail Center Sparks $200 Million Acquisition Deal

By Alex Girda, Associate Editor

One of the largest retail power centers in Silicon Valley recently traded hands for a substantial fee. The Plant retail center was recently acquired by Phoenix-based Cole Credit Property Trust IV for the staggering amount of $205 million. The transaction is one of the largest the real estate investment trust has ever shelled out for an asset.

According to the Phoenix Business Journal, news of the transaction surfaced after Cole Credit filed its 8-K with the Securities and Exchange Commission. A final closing date for the deal is set for March 1.

The Plant is one of the largest properties of its kind in the entire region, offering a total of 650,500 square feet of retail space in the city of San Jose, only 510,000 of which were included in the actual deal. This is a result of the fact that a number of retailers have acquired the space they inhabit at The Plant.

Big names amongst the residents of the power retail center include Best Buy, Home Depot and Target. The facility sports a strong occupancy rate, with only five percent of the available space currently vacant.

Cole Credit Property Trust IV is one of the six real estate investment trusts managed by Cole Real Estate Investments, and this recent purchase represents a landmark buy for the entity—which was also responsible for the acquisition of the Canarsie Plaza in Brooklyn, N.Y. for $124 million in 2012.

According to data provided by Marcus & Millichap Real Estate Investment Services, The Plant’s strong vacancy figures are perfectly in tune with the surrounding area. San Jose has been under the national average when it comes to retail vacancies for a considerable amount of time, illustrating that the demand is well in place for such properties.

For more market data from San Jose, click here.

Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com

Recent Transactions in Bay Area and Silicon Valley Cement Area’s Appeal

By Alex Girda, Associate Editor

One of the largest contemporary commercial real estate transactions in the Bay Area was recently completed in Oakland. The building, serving as Clorox’ headquarters in the city’s downtown area, was reportedly acquired for a total of $110 million, InsideBayArea.com reports. The buyer was active real estate investment company Westcore Properties.

The new owner has already announced its intentions to renovate portions of the office building and upgrade the value of the property by bolstering its tenant roster. The 520,000-square foot building located at 1221 Broadway has served as Clorox’ headquarters since 1988 and will continue to be used by the household item manufacturer as per the terms of the sale.

The company has opted to sell its 24-story office tower due to an ongoing process of moving a large chunk of its workforce to its new office and research campus in Pleasanton. Clorox will stay on as the building’s anchor tenant, a long-term lease being agreed to for around 300,000 square feet of space in the 1976-built highrise.

Also in recent San Francisco Bay Area office market news, a Mountain View building was recently acquired by Peninsula Land & Capital for a total of $17.75 million. This particular transaction attracted interest due to the profit the seller generated through the sale, Seagate Properties Inc. having previously acquired the asset for only $9.5 million. The 1989-built, 42,622-square foot facility had an occupancy rate of 66 percent, and its tenant roster included names such as Guardian Analytics, LyLife.com and Infor Systems.

The transaction illustrates the increasing interest in office assets not only for Silicon Valley in particular—but for the Bay Area as a whole. The positive influence of tech giants such as Facebook, Google and Apple that have, during the past couple of years, committed to Silicon Valley continues to attract real estate investment companies.

Image courtesy of user Coolcaesar via Wikimedia Commons

For more market data from the San Francisco Bay Area, click here.

Forest City Enterprises Offloads Coveted Office Property in Downtown San Jose

By Alex Girda, Associate Editor

One of San Jose’s largest office buildings recently traded hands after Forest City Enterprises Inc. agreed to the terms with CBRE Global Investors for sale of Fairmont Plaza. CBRE Global Investors paid $93.1 million for the Bay Area asset.

The property, also known as the Knight-Ridder building, was sold in order to generate net cash proceeds for the Cleveland-based owner. Also part of this strategy was the recent sale of the company’s Emerald Palms apartment community in southwest Miami.

Fairmont Plaza is a 17-story office building located in San Jose’s downtown area. It offers 405,000 square feet of quality office space in the emerging San Francisco Bay Area. Built in the late 1980s, the property is one of the most coveted Class A office properties in the downtown area.

Its tenant roster currently includes names such as Accenture and KQED, as well as the members-only Capital Club.  The $93-million sale has earned Forest City approximately $28 million in net cash proceeds, according to data provided by the company.

The sale of Fairmont Plaza, along with the aforementioned southwest Miami apartment complex, marks the company’s focus on core markets, with assets in non-core markets being traded away in order to generate cash. In fact, the company’s 12 recent sales have, until now, provided Forest City Enterprises with more than $125 million in net cash proceeds. The company currently handles $10.7 billion worth of commercial and residential real estate assets which it owns, develops and manages.

For more market data from the San Francisco Bay Area, click here.

Image courtesy of HarshLight via Wikimedia Commons 

TMG Partners Acquires Recently Vacated Office Property, Seeks to Improve Existing Space

By Alex Girda, Associate Editor

A vacant North San Jose office building was recently acquired by San Francisco-based real estate company TMG Partners. The buyer acquired the Class A property with the aid of equity partner Alcion Ventures LP. The seller was real estate investment company Kaufman Jacobs, based in Chicago.

The deal was perfected for an undisclosed amount, with the buyers representing themselves and Kaufman Jacobs employing Mark Ziemendorf—a representative of Cornish & Carey Commercial Newmark Knight Frank.

The Montague Park-located office building stands at 2851 Junction Ave. in the northern part of San Jose and offers potential tenants 153,000 square feet of Class A office space. The building was completed in 2002 and has housed offices of the county of Santa Clara.

The building is now empty, a situation that will help the new owner with its plans to renovate quite a bit of the property while completely rethinking the lobby, common areas, restrooms and outdoor eating areas. Additionally, brand new sustainable landscaping and electric vehicle-charging stations will also be introduced.

Upcoming works at the site were confirmed by TMG Partners CEO Michael Covarrubias, who stated that the company “will have the opportunity to further renovate and improve in order to continue to take advantage of the strong tenant demand for institutional quality buildings.”

Active for the past 28 years, TMG was founded and headquartered in San Francisco. The company is a full-service real estate developer and property manager that has had a hand in developing around 20 million square feet of commercial real estate throughout the Bay Area.

Image courtesy of loopnet.com

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North Financial District Office Building Sold to Multi-Employer Property Trust

By Alex Girda, Associate Editor

475 Sansome is San Francisco’s latest office property to be traded after Multi-Employer Property Trust and Bentall Kennedy, MEPT’s real estate advisor, acquired the property for an undisclosed amount. The deal for the building—located at the corner of Sansome Street and Clay Street in the North Financial District—was brokered by representatives from Holiday Fenoglio Fowler’s local office.

The 21-story, 353,269-square-foot office tower is part of a growing submarket in close proximity to the well-known Transamerica Pyramid Center and the Embarcadero Center—part of one of the most active office markets in the country.

The trust’s investment was made due to its presence in a market that meets the criteria listed by Executive Vice President and MEPT Portofolio Manager at Bentall Kennedy, David Antonelli.

“[The market] has high barriers to entry, supply constraints and solid fundamentals driven by a diverse economic base,” noted Antonelli.

475 Sansome is a building that currently has a 90 percent occupancy rate and tenant roster that includes high-profile technology companies and national and regional professional services firms. The building meets high environmental standards, offers high quality parking and features large floor plates. It currently holds two green distinctions, having been awarded the Leadership in Energy and Environmental Design (LEED) for Existing Buildings Gold certification, as well as the Environmental Protection Agency’s Energy Star designation.

Multi-Employer Property Trust is currently in the market for high-end office properties located in central business districts of major cities across the U.S. The fund is also looking for grocery-anchored retail centers and multifamily assets in urban markets serving the “Echo-Boom generation.”

Image courtesy of loopnet.com

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Berkeley Center Trades Hands as Downtown May See Development Increase

By Alex Girda, Associate Editor

A retail and office complex in downtown Berkeley was recently acquired by a Los Angeles-based investor. Hill Street Realty LLC paid around $20 million for the property, a per-square-foot rate of $217.

The complex is made up of a number of buildings located in an area bordered by Shattuck Avenue, Aliston Way and Harold Way, the San Francisco Business Times reports. The former owner is Marin County businessman Roy Nee, who held the property through a private family trust.

Berkeley Center is a 92,000-square foot property that sits on a 1.75 acre site, where it is joined by The Hotel Shattuck—a property that was not included in the transaction. Newmark Grubb Knight Frank representatives Joshua Levy and Matthew Dobson arranged the transaction on behalf of the buyer. With new zoning in place for downtown Berkeley, the area is set to see a development increase. This means the purchase could prove itself even more profitable over the coming years.

The office and retail complex houses Shattuck Cinemas as a main tenant, while other names housed include Starbucks, Habitot Children’s Museum and the United Auto Workers Union Local 2865. The property currently has an occupancy rate of 98 percent. The new owner, Hill Street Realty, was founded back in 2001 by its current principal, Joseph Penner, and has since bought assets worth more than $100 million. The company buys, sells and manages real estate properties.

Image courtesy of myaptportal.com

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Santa Teresa Village Shopping Center Acquired by Maryland-based REIT

By Alex Girda, Associate Editor

The Santa Teresa Village Shopping Center in San Jose recently traded hands in one of the largest transactions involving neighborhood shopping centers in the Bay Area this year. Maryland-based Retail Opportunity Investments Corp. was the buyer, while the former owner is Santa Teresa Village LLC—an entity created by local contractor Barry Swenson Builder. The value of the transaction was a reported $31.6 million, according to the San Jose Business Journal.

Santa Teresa Village Shopping Center is a 124,792-square-foot retail property currently anchored by a Nob Hill Foods and Ace Hardware. The shopping venue has a low vacancy rate of around five percent.

Cassidy Turley, along with Kidder Matthews representatives, arranged the transaction on the buyer’s behalf, while the seller was advised by Prime Commercial. The per-square-foot rate that Retail Opportunity Corp. paid for the complex is approximately $250. The Maryland REIT’s offer immediately convinced Barry Swenson Builder executives to finalize the sale.

The San Jose area is set to benefit from the housing market’s recovery, as this will have immediate effects in the demand for retail space. The deal in question is a perfect example of new investors being attracted to the commercial market in order to make sure that they can be part of the upward trend.

Retail Opportunity Investment Corp. chose the Santa Teresa Village Shopping Center in concordance with its criteria for new acquisitions. The REIT seeks properties mainly in large metro areas of the Western and Eastern U.S. that are mostly neighborhood and community shopping spots, anchored by a major grocer and located in areas where the average household income rests in the upper percentile of the market.

Image courtesy of loopnet.com

Emeryville Public Market Trades Hands, Set for Massive Expansion

By Alex Girda, Associate Editor

The Emeryville Public Market is the latest major San Francisco Bay Area property to trade hands, after former owners TMG Partners and Rockwood Capital announced the sale of the mixed-use asset. The buyer is a partnership between Angelo Gordon and City Center Realty Partners. Financial terms for the acquisition deal were not disclosed, but the investors reportedly paid around $60 to $70 million for the development, according to industry specialists. Holiday Fenoglio Fowler represented the seller in the deal.

The Emeryville Public Market is a 270,000-square-foot mixed-use property that was developed by TMG Partners during the late 1980s. The owner recapitalized on the 5959 Shellmound St. property in 2003 when it began its collaboration on the project with current partner Rockwood Capital. The office and retail development underwent renovations and improvements of about $4 million that would increase the Market’s walkability factor and create an integrated community in which working, dining and shopping could be done in a concentrated spot.

Leasing at the facility also kicked into a higher gear with retailers such as Urban Outfitters, Guitar Center and Hot Italian rounding out the existing tenant roster during the past year. The San Francisco Exploratorium contributed with exhibits of arts and sciences to the development’s plate.

The aforementioned initiatives led to the awarding of a number of distinctions to the Emeryville Public Market. These include a 2010 California Catalyst Communities Pilot Gold Level Designation, as well as the US Green Building Council’s LEED Neighborhood Design Platinum Designation.

Additionally, the development has entitlements in place for approximately 830,000 square feet of office, retail and multifamily space. The new owner is set to act in that direction and consolidate the mixed-use community into an urban village in the growing submarket of Emeryville.

Image courtesy of Emeryville Public Market’s Facebook page at facebook.com/PublicMarketEmeryville