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Basin Street plans major upgrades for newly repurchased Petaluma buildings
PETALUMA — Basin Street Properties, which built much of Redwood Business Park in Petaluma and sold a number of the buildings in in a major 2005 deal, today said it purchased five of the buildings in the development for $8 million from the lender that had taken them back and plans to spend several million dollars on upgrades over the next two years.
“The Petlauma market in the next six to nine months will be radically different,” said Matt White, president. “It will be healthier than has been in last 25 years, because there will be diversification of the tenant base to not be focused on just telecom but a wide range of tenants.”
The four office buildings Basin Street purchased March 17 are 40 percent occupied. Major tenants include Force 10, formerly known as Turin Networks, Wells Fargo Bank and the U.S. Department of Agriculture.
Basin Street’s bid for all five buildings — 1415 N. McDowell Blvd., 1301, 1310 and 1318 Redwood Way and the business park’s day care center at 1485 N. McDowell — won out against contenders interested in buying just one or a few buildings, according to Mr. White. The same day as the sale, Basin Street’s purchase entity — BSP Round Two Office Investors LLC — sold the 7,400-square-foot day care center to investors Yusheng, Lin and Eric Liu for an undisclosed sum.
These five buildings were among 15 office and office-flex buildings in Redwood Business Park and Santa Rosa that Equity Office Properties gave back to lenders last year. In mid-2005, Basin Street had sold Equity Office 44 such properties in Santa Rosa, Petaluma and Novato for about $265 million, including assumption of $35 million in debt on the Redwood Business Park properties.
Since last, a number of investors, businesses and organizations have come forward to buy former Equity Office buildings at substantially lower prices than the 2005 price. Dawse Properties, led by proprietors of Berkeley Nucleonics in Marin County, purchased one, and Petaluma Health Care District bought one for its new community clinic under construction now.
On March 16, SMK Investment Co., led by Kamran Shamsavari, president and chief executive officer of Petaluma-based tech company Xandex, purchased the nearly 24,000-square-foot 1360 Redwood Way building for an undisclosed sum. Tony Sarno of Keegan & Coppin represented the lender in the sale, and Chris Castellucci also of Keegan & Coppin represented the buyer.
Early last year, ownership of electronic keypad entry systems maker Digilock purchased two north Petaluma buildings for new headquarters and manufacturing.
“There are a lot of buildings that are selling and a lot of buildings being bought by users, which means a lot of new jobs and new energy is coming back into the market,” Mr. White said.
As an example of recent activity, he pointed to Basin Street’s Petaluma portfolio of a half-million square feet of existing retail and office buildings, 90 percent of which are leased.
The big difference in sale prices for the five Redwood Business Park buildings now compared with prices in 2005 is the reality of the design of the buildings, according to Mr. White.
“A lot buildings we built in the 1980s and ’90s never were intended to be office,” he said. “When telecom took off, they were converted to office buildings. The buildings now are going back to what they originally intended to be to serve the customer.”
The largely single-story buildings in the business park were planned to have 20 percent to 50 percent office space and the rest for light manufacturing or warehousing.
“Now a lot of buyers are coming in and saying that’s what they want to do with the buildings,” Mr. White said. “That’s great, because when we sold them in 2005, they were priced and sold as office buildings because they were leased as office buildings.”
Link to article: http://www.northbaybusinessjournal.com/31181/basin-street-plans-several-million-in-upgrades-for-newly-repurchased-petaluma-buildings/
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