Sales of 18 former Equity Office buildings in Petaluma has been grabbing headlines for the past 12 months, but another Petaluma portfolio of buildings in Redwood Business Park has changed hands.
San Francisco-based Savoy Corp. sold three buildings totaling nearly 88,000 square feet at 5330 Old Redwood Hwy., 1341-1353 Redwood Way and 1363-1367 Redwood Way to PB&J Acquisitions, LLC, in mid-June for $5.1 million, or about $58 a square foot. Savoy had the property listed for $6.5 million.
[caption id="attachment_36620" align="alignright" width="288" caption="One of the former Savoy buildings in Petaluma"][/caption]
Formed in March, PB&J is an investor in value-add Northern California properties, according to Bill Sumski, a San Francisco real estate attorney who has also been involved in major Bay Area redevelopment projects and worked with PB&J. Tony Crossley and Tim Maas of Colliers International San Francisco Investments represented Savoy the recent sale.
"We want to leverage off the good momentum in the Petaluma marketplace," Mr. Sumski said. "There is opportunity to take advantage of the increase in occupancy and increase in rents. Generally, we're buy and hold."
The investors are looking for continued northern migration of companies from southern to northern Marin County to Petaluma, he said.
Haden Ongago and Mark Carrington of Cornish & Carey Commercial Newmark Knight Frank are marketing the properties, which are 65 percent occupied. Significant tenants are Union Bank, Broadcom and Computer Associates.
Savoy sold a 34,000-square-foot building at 1445 N. McDowell Blvd. for about $2 million in July 2010. Savoy sold it and a 62,000-square-foot San Francisco office building to Rona Real Estate, LLC, for a total of $15 million.
***Petaluma commercial real estate experts have been expecting the string of large leases and property sales to company owners to bring down the very high office vacancy rate, and the latest figures bear that out.Nearly 228,000 square feet of Petaluma office space came off the market in the 12 months ending in June, according to new figures from Keegan & Coppin. Together with nearly 19,000 square feet of net space absorption over the period in Santa Rosa, net absorption countywide was 184,3oo square feet.Over the 12 months, the office vacancy rate countywide fell more than a percentage point from a high figure of 23.8 percent to a still high 22.4 percent at the end of June, according to the brokerage.The Petaluma office vacancy rate fell nearly three percentage points to 30.9 percent at the end of the second quarter with 970,000 square feet available from 33.8 percent for 1.06 million square feet vacant.Cornish & Carey Commerical Newmark Knight Frank reports that Sonoma County had 123,000 square feet of class A office space net absorption in just the first half of this year, with a net of 43,000 square feet coming off the market in Petaluma and nearly 60,000 square feet in Santa Rosa.Little of the net leasing activity this year has been for class B office space, which makes up roughly half the 8 million-square-foot Sonoma County market, the brokerage reported. Net absorption was negative 14,000 square feet for that class of space.The Sonoma County industrial market fared far better over the past 12 months, according to Keegan & Coppin. Thanks to net space absorption of 217,000 square feet in Petaluma, 209,000 square feet in Santa Rosa and 185,000 square feet from the Sonoma County Airport-area business parks north, the county's major industrial markets had 585,000 square feet less space available for lease than a year earlier.In just the past quarter, the countywide industrial vacancy rate fell to 12.2 percent from 13.4 percent when the first quarter ended, the brokerage reported.In Petaluma, the change in available industrial real estate to lease was dramatic. The vacancy rate fell to 12.4 percent for 662,000 square feet available at the end of June from 17.5 percent for 940,000 square feet vacant, according to Keegan & Coppin.