Marin sales, lease activity ?continue to move north

At the end of 2013 and beginning of 2014, four major sales occurred: 100-500 Drakes Landing Rd. (130,177 square feet), Wood Island Office Park (82,731 square feet), San Rafael Corporate Center (314,000 square feet) and Rafael Town Center (133,098 square feet). As 2014 progressed, the wave moved north.

Two major San Rafael properties sold: 4000 Civic Center Dr. (142,000 square feet) to PSAI Realty Partners in June and 4040 Civic Center Dr. (130,000 square feet) in October to Ellis Partners. Also, 1050 Northgate Dr. (58,322 square feet) sold in November.

Currently, 899 Northgate Dr. in San Rafael (54,406 square feet) and, 75–88 Rowland Way in Novato (143,444 square feet) are on the market, with Hamilton Landing in Novato (405,000 square feet) about to hit the market. Clearly, investors are looking for opportunities in the Bay Area and have found northern Marin properties well-priced, given pricing seen in the rest of the Bay Area and lease rates rising.

At the end of 2013, Marin’s commercial office vacancy stood at 19.55 percent. Vacancy decreased during every quarter of 2014 and finished at 17.39 percent at year-end. Marin’s office full-service asking rates in this timeframe increased 2.65 percent, from $2.60 per square foot to $2.67. During the same period, Novato office vacancy dropped from 27.11 percent to 25.86 percent, and overall office asking rates rose 4.17 percent from $2.18 per square foot to $2.27. This trend is poised to continue as vacancies south of Novato dwindle.

Biotech continues to drive the northern Marin office market. The city of Novato and the Marin Economic Forum have been very active promoting life sciences, centered around the Buck Center for Research and Aging. Two orphan-drug companies, Raptor Pharmaceutical and Ultragenyx Pharmaceutical, both expanded dramatically in Novato last year. Ultragenyx leased 43,517 square feet at 60 Leveroni Ct. in April, and Raptor expanded at 5 Hamilton Landing by 19,106 square feet in June, now occupying 60,987 square feet there.

BioMarin Pharmaceutical is in the midst of constructing an 85,000-square-foot research-and-development office building at San Rafael Corporate Center. The office project is scheduled to be delivered by the first quarter of 2016. As they continue to expand, BioMarin has expressed a desire to build another 70,000-square-foot building. Several tenants in San Rafael Corporate Center have recently relocated as a result of BioMarin’s expansion, including Monetise, Wells Fargo Home Mortgage and Marin Clean Energy, while others are currently in the market. This overflow from the property will help improve Marin absorption statistics in 2015.

Haden Ongaro (415-526-7649, hongaro@newmarkccarey.com) is managing director of Newmark Cornish & Carey’s North Bay offices in San Rafael and Santa Rosa.

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