Pleasant Hill Retail Property Trades Hands in $100 Million Deal as Retail Rates Make a Comeback

By Alex Girda, Associate Editor

One of the largest retail properties in Pleasant Hill recently traded hands, with Loja Real Estate LLC announcing the sale of one its most important assets. The Downtown Pleasant Hill Shopping Center was acquired by UBS Global Asset Management for a fee of approximately $100 million. Handling the transaction on behalf of Loja Real Estate was a Colliers International team consisting of Kevin van Voorhis, James Kaye, Jay Gomez and Lindsey Lantis.

The Downtown Pleasant Hill retail center offers 345,687 square feet of commercial space in San Francisco’s Pleasant Hill community. The center is the area’s main commercial hub, featuring a 40-strong tenant roster that includes names such as Century Theaters, Lucky Supermarket, Bed Bath & Beyond, Michaels, Ross, Golfsmith, Paul Mitchell the School and Zachary’s Chicago Pizza.

Loja Group LLC, a real estate investment management entity controlling Loja Real Estate LLC, has praised the newly offloaded property in a press statement as being a “strong property.” Katherine Burr, CEO of Loja Group LLC, said that “this was the opportune time to sell and advance other important initiatives at Loja.”

The multi-tenant retail property’s sale illustrates the increase in median prices for retail properties in the San Francisco Bay Area. Data from Marcus & Millichap Real Estate Investment Services points out that over the past five years, average prices decreased considerably in terms of both single-tenant and multi-tenant retail properties, with 2012 being the first year of growth since 2006. Single-tenant properties now charge higher per square foot rates than multi-tenant properties, with considerable growth being clearly visible for the past year.

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

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Over-Performing San Francisco Office Market Produces Yet Another Office Deal

By Alex Girda, Associate Editor

San Francisco’s improving office market has produced yet another deal after a joint venture created by Hines and Invesco Real Estate moved to acquire an iconic construction located in the city’s South Financial District. The two real estate companies have completed a deal making their joint venture the new owner of the Rialto Building. While official financial terms for the deal were not disclosed, market specialists place the transaction’s value at around $57 million. The entity selling the Rialto Building was Africa Israel USA, or AFI USA.

Located at 116 New Montgomery St., the Renaissance-style Rialto was initially developed in 1902. The Great Earthquake of 1906 called for an extensive interior rebuilding and renovation process to be undertaken by the Meyer & O’Brien Architects-designed structure. It offers tenants 135,486 square feet of office and retail space.

AFI USA had owned the Rialto since 2007, a time frame in which the company had restoration works focusing on the original design of the structure, with main points of interest being the lobby, the elevator’s ornate metal doors, the painted panel ceiling, marble floor and bronze staircase. The building had an occupancy rate of around 85 percent at the time the transaction was completed. The current tenant roster includes names such as Trulia, Nelson/Nygaard, Walgreens and Chipotle.

According to a press statement issued by Hines Senior Managing Director Cameron Falconer, now that the building is part of the company’s portfolio, “Hines and Invesco will continue to invest in the building to complete its transition to a ‘creative core’ asset that caters to San Francisco’s burgeoning technology and multimedia industry tenants.” AFI USA CEO, Tamir Kazaz, went on to say that the deal “proves that San Francisco is still unmatched as the nation’s top-performing office market.”

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Former Solyndra Factory Given New Life as Seagate Unveils R&D Facility Plan

By Alex Girda, Associate Editor

The former Solyndra solar factory in Fremont is seeing sunshine again as the abandoned facility is set to be re-adapted. The site, previously owned by the failed solar panel manufacturer, will be transformed by Seagate Technology into a new research and development complex to be used by the data storage giant.

As Seagate is looking to the future of disk drives with its successful solid state and hybrid data disks, the company wants to capitalize on its current success and come up with the next big thing in data storage systems.

The old Solyndra site will be given a complete makeover as it morphs into a $180 million state-of-the-art R&D facility. Located on Kato Road in Fremont, the 411,000-square foot complex was bought by Seagate earlier this year for a fee of $90 million, San Jose Mercury News writes. The rest of the $180 million budget will be directed towards acquiring and installing the equipment that will turn the former factory into a Seagate facility that would create up to around 600 jobs in the field.

According to Mercury News, Seagate shopped around the Bay Area and Silicon Valley looking at around 40 potential locations to house the new project.

Solyndra closed down in 2011, a move that resulted in more than 1,000 layoffs. Seagate’s takeover of the facility will be a move welcomed by the local community, one that most likely would have preferred to avoid having an eyesore in the form of the former solar-panel manufacturing plant.

Image courtesy of user DarkSilverR53 via Panoramio

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Essex Property Trust Picks up Fox Plaza Residential Component, Commits to Improvement of New Asset

By Alex Girda, Associate Editor

Essex Property Trust has moved into San Francisco’s multifamily market to acquire a large chunk of housing units—part of a mixed-use building located in the city’s highly publicized Mid-Market district. The fully integrated real estate investment trust has shelled out $135 million for the residential component of Fox Plaza—a 29-story high-rise building located at 1390 Market St.—from Archstone, who was initially looking for a sale price more in the $150 million range.

The 444 units that Essex has acquired, located on floors 14 through 29, offer great views of the city and feature high ceilings and large decks. Three quarters of the units are 450-square foot studio apartments, with the remaining apartments featuring one- and two-bedroom floorplans. Essex Property Trust is also getting a two-level underground parking facility that can accommodate as many as 405 vehicles.

The acquisition deal did not include the lower floors featuring commercial office space. However, an adjacent two-story, 37,800 square-foot commercial building was part of the agreement.

The REIT’s interest in this second building is clearly linked with the fact that there is permitting in place for a 250-unit, 11-story apartment development. While Essex maintains that it has no immediate intentions of activating the entitlement, the entity has confirmed that the possibility of developing the tower will be evaluated in the future.

The new owner is set to commit $27 million over the next couple of years for the renovation and improvement of Fox Plaza. The 1968-built structure will undergo extensive interior and exterior improvement work in order to raise its current profile in one of the main emerging submarkets in the San Francisco Bay Area.    

Photo courtesy of user J. Ash Bowie via Wikimedia Commons

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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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