Plans could include sprucing up street level spaces
SANTA ROSA — A commercial real estate investment company that owns a number of North Bay properties purchased the 58,000-square-foot downtown Santa Rosa office building that houses the publishing offices of Santa Rosa Press Democrat and the Business Journal and plans to refurbish the mostly vacant ground floor for retail or office tenants.
Cornerstone Properties, which recently relocated its corporate offices from San Mateo to Petaluma, purchased 427 Mendocino Ave. and four nearby parking lots from affiliates of Daytona Beach, Fla.-based Halifax Media Group on April 15, according to public records. The purchase price wasn’t disclosed.
Attractive aspects for the deal were stable, sizable tenants and plenty of parking, according to Keegan & Coppin Co., Inc./ONCOR International agent Brian Keegan, who represented Cornerstone Properties in the purchase. There are seven years remaining on the current term of the leases to The Santa Rosa Press Democrat, Inc., and Sonoma Media Investments, Inc., which also owns the Journal, Petaluma Argus-Courier, Sonoma Index-Tribune as well as several other publications and the MediaLab website design service.
“It’s the last real big private parking play downtown,” Mr. Keegan said. “Parking is a big piece of the puzzle.”
The purchase includes a parking lot immediately south of the building, one across Ross Street from it and two lots on Seventh Street between Riley and Humboldt streets.
Steve Falk, president and CEO of Sonoma Media Investments, said Cornerstone Properties wants to keep the company as a long-term tenant.
“It is good that he is wanting to spruce up this area of downtown,” Mr. Falk said, referring to Alon Adani, a Cornerstone Properties principal focused on the North Bay.
Cornerstone Properties wants to add a lot of glass to the largely windowless street level of the building to accommodate restaurant, grocery or office uses, according to Mr. Keegan. When asked about rumors of a grocery store occupying the space, he said that none are looking for a downtown location currently.
The space currently has offices and a reception area in the front and high-ceiling warehouse space in the back, where the Press Democrat printing presses were before the Rohnert Park plant was constructed.
A timeframe for the renovations wasn’t available. Mr. Adani could not be reached for comment.
Cornerstone first invested in North Bay property in 2006. The first purchase was a 18,700-square-foot retail center at 2720 Santa Rosa Ave. in Santa Rosa. Later that year, the company acquired a 156,000-square-foot former Weigh-Tronix complex at 2320 Airport Blvd., located at the entrance to Charles M. Schulz–Sonoma County Airport.
The North Bay portfolio took a large jump four years later, when Cornerstone purchased the five-building, 170,000-square-foot former Cisco Systems campus in north Petaluma a fraction of what Cisco had paid for them.
Buy at a low price, refurbish and bring to market at attractive rental rates to fill buildings was a strategy Cornerstone had employed with a 1 million-square-foot portfolio in Silicon Valley, Mr. Adani told the Business Journal at the time.
Since then, Cornerstone acquired and sold a few more Sonoma County buildings. That included 93,000 square feet in two former Equity Office office buildings acquired in north Petaluma in 2011 and the sale of 1380 Redwood Way in Petaluma’s Redwood Business Park last year.
In January of this year, Cornerstone acquired three of four office and industrial buildings near the airport in a loan special servicer auction. The final purchase price for the buildings totaling 130,000 square feet wasn’t disclosed.
Halifax and investors purchased 427 Mendocino from a New York Times Co. affiliate in January 2012 for $4.8 million. That was at the same time Halifax picked up the a portfolio of newspapers nationwide, including the Business Journal, Press Democrat, Petaluma Argus-Courier and the Press Democrat‘s printing plant in Rohnert Park.
Halifax sold the Journal, Press Democrat, Argus-Courier and the Rohnert Park printing plant that November to Sonoma Media Investments. But 427 Mendocino wasn’t part of the deal, and Halifax relocated the Journal and departments of the Press Democrat off the 20,000-square-foot first floor to prepare it for retail tenants.
Mike Flitner and Danny Jones, also of Keegan & Coppin, represented the sellers. The new corporate offices for Cornerstone are at 5401 Old Redwood Highway, Suite 110, Petaluma, 94954.
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