Insurer has first right to buy; reaffirms 'long-term commitment to this region'NOVATO -- Three and a half years after acquiring Marin County's largest office property for $313.8 million in cash and debt and announcing plans for a massive mixed-use redevelopment of the Fireman's Fund Insurance Co. headquarters in Novato, the owners plan to sell it.
The three-building, 710,000-square-foot campus at 775, 777 and 779 San Marin Drive was set to be rolled into a real estate investment trust San Diego-based private realty investment firm American Assets was forming late last year, according to a Sept. 13 regulatory filing.
Also in that filing, the company touted among prospects for internal growth for the nascent REIT the potential for entitlements and approvals from the city of Novato for a 766,000-square-foot mixed-use campus project. The planned 65-acre redevelopment, called Commons at Mt. Burdell, would keep the three office buildings and add 700,000 square feet of office and retail space, a 170-room hotel with meeting center, health club, community facility and 150 multifamily housing units.
American Assets Trust went public in a $648 million initial offering in January, but the Fireman's Fund property wasn't part of the REIT's portfolio. The property was the largest in the private company's holdings.
An American Assets affiliate has a 25 percent stake in Novato FF Venture LLC, one of the entities that purchased the property in 2007. General Electric Pension Trust owns the rest.
American Assets reported in the September filing a $38.5 million impairment loss for the Fireman's Fund property venture for the first half of last year because of decreasing property value and the possibility of having to sell the property rather than hold it long term.
The Fireman's Fund lease, which runs through November 2018, gives the insurer the first option to purchase the property in any sale. On Aug. 27 American Assets asked the insurer to decide by Sept. 27 whether it would buy the buildings or remain a tenant.
On Oct. 10, American Assets reported in an amended filing that it wouldn't pursue the purchase of the Fireman's Fund campus for the new trust.
"Our predecessor's interest in Fireman's Fund headquarters will be either distributed to its current equity owners or transferred to a new entity owned by such owners," the filing said.
Fireman's Fund is still evaluating whether to purchase the property or rent, according to a spokesman.
"It's important to note, however, that Fireman's Fund has a long-term commitment to this region and will remain a tenant of this property regardless of who becomes the new landlord," said Atle Erlingsson.
Steven Leonard and Trevor Buck of Cassidy Turley BT Commercial in San Rafael are assisting New York-based Eastdil Secured in marketing the property for sale.