NORTH BAY -- Three major players in Petaluma commercial real estate have spurred a number of companies to undertake expansions in the past 18 months.
Basin Street Properties, which built much of Redwood Business Park in the city starting three decades ago, considerably expanded its North Bay holdings this year with the repurchase of eight buildings in two deals and is in preparing to accommodate a major expansion by current tenant Enphase Energy.
Cornerstone Properties also this year added two more buildings to the five of the former Cisco Systems campus acquired in late 2009. The company now has nearly 300,000 square feet of space in the city.
[caption id="attachment_39788" align="alignright" width="446" caption="Basin Street Properties acquired the 210,000-square-foot former Alcatel-Lucent campus in Petaluma in June. Now called Sequioia Center, it will be the new headquarters of Enphase Energy late this year."][/caption]
Also a longtime Petaluma owner, RNM Properties is accommodating another large job-creating expansion in Petaluma, a 40,000-square-foot new headquarters for existing tenant Athleta, a women's activewear division of Gap Inc.
Basin Street and Cornerstone took advantage of a period in which dozens of commercial buildings in the city changed hands to acquire buildings at a fraction of what the properties sold for in the middle of the last decade.
"We like to recycle buildings," said Alon Adoni. He is head of San Mateo-based Cornerstone's North Bay portfolio, which at nearly a half-million square feet now is a large proportion of the company's total holdings, which he said are more than 1 million square feet. "We like to reuse them, renovate them as much as we can to bring them up to current market standards."
Basin Street Properties has increased its North Bay holdings by 35 percent in just the past six months with two Petaluma purchases of lender-owned buildings, and now the region makes up more than half the company's 2.5 million-square-foot portfolio of office, retail, hospitality and apartments in California and Nevada, according to President Matt White.
"We have reached a healthy concentration point in Petaluma," he said. "We still have a lot of capacity in Santa Rosa and Marin County, and we're looking for new deals in both of those markets."
One such deal is a large local multifamily complex, a property type ripe for acquisition by a company with access to capital for expensive upkeep and upgrades as well as construction-management experience, Mr. White said. The company also is looking for deals in Las Vegas, Phoenix, Portland, Ore., Reno, Nev., and Sacramento.
Following the more than $265 million sale in 2005 to Equity Office Properties Trust of about 1.4 million square feet of office and office-flex buildings in Sonoma and Marin counties, Basin Street Properties diversified into markets outside the North Bay, starting with Sacramento and Reno, and further into hospitality and retail properties.
Basin Street relocated its headquarters to Reno in 2009 but continued to look for North Bay opportunities. In December of that year, the company entered joint-venture ownership of the 116,000-square-foot Petaluma Marina Business Center connected to a Sheraton hotel.
Then in June of this year, a Basin Street affiliate paid about $13 million for a 210,000-square-foot, three-building former Alcatel-Lucent campus now called Sequoia Center to serve as the new home of rapidly growing Petaluma photovoltaic microinverter maker Enphase Energy. In March, another Basin Street affiliate purchased five other Redwood Business Park buildings for $8 million, selling the park's day care center to an investment group in the sale.