SAN RAFAEL – One of Marin County's largest commercial properties reverted to its lender in a foreclosure this afternoon.
Marin Commons, a 455,000-square-foot-office complex in north San Rafael just off Highway 101, was taken back by its lender, Connecticut General Life Insurance Co., in a trustee's sale on the front steps of City Hall today.
"It was a victim of the loss of two large tenants and a shifting market," said Haden Ongaro, one of the Orion Partners brokers marketing the property for lease.
The previous owner of the two-building complex at 1600 and 1650 Los Gamos Drive, Hines San Rafael LLC, owed $62.3 million on two loans at the time lender Connecticut General Life Insurance Co. filed a notice of trustees' sale on May 12, according to public records.
Houston-based Hines and General Electric Capital acquired the property, then called Marin Technology Center, in July 2005. Hines San Rafael obtained a $56.3 million mortgage and an $8.5 million construction loan from Connecticut General subsidiary CIGNA Investments. At the time of the foreclosure, nearly $59.1 million was owed on the first mortgage and $3.28 million on the construction loan.
On Thursday, Connecticut General withdrew the trustee's sale for the larger loan due to lack of adequate bids. No bids were submitted for the smaller loan.
When Hines San Rafael acquired the property from AMG Realty Partners it was 53 percent occupied. At the time of sale today, it was about 30 percent leased, according to Mr. Ongaro. Current tenants are Genworth Life Insurance Co., Lucas subsidiary THX, Kaiser Permanente, Menlo Capital and day-care provider Bright Horizons Children's Center, whose improvements are under construction.
A deal for a 10,000-square-foot lease with a local company is pending. The starting point for rent negotiations is $2.60 a square foot, full-service.
Former tenant Health Net consolidated its Bay Area offices last fall to a new property in east San Rafael. Another former tenant, video game maker Stormfront Studios, leased 30,000 square feet in the building but went out of business shortly after occupying the space.
Hines acquired the nearly three-decade-old property with plans to modernize it and perhaps add housing. The 315,000-square-foot 1600 Los Gamos building was erected in 1975 for Fireman's Fund Insurance Co., which later moved to Novato.
The 141,000-square-foot 1650 Los Gamos building was finished for American Express Life Assurance in 1981. Since Hines took over management of the property, it has renovated the lobby of 1650 Los Gamos, repainted the buildings and outfitted three suites totaling 9,000 square feet to accommodate the typical small Marin tenant looking for offices to occupy quickly, according to Mr. Ongaro.