North Marin County office real estate adapts to changing employer needs

The northern Marin County office market has suffered some of the same trends witnessed in other Bay Area markets: a delayed return to office, large companies downsizing, a flight to quality space and decreasing sales prices for office buildings.

As companies continue to struggle with return to office, two of northern Marin’s largest employers — Autodesk and FICO — put large blocks of space on the sublease market, some of which has or will come to market as direct available space.

The Autodesk headquarters with 118,000 square feet at 111 McInnis Parkway in San Rafael is available along with another 47,000 square feet of former Autodesk space at 3900 Civic Center Drive in San Rafael.

FICO has 45,000 square feet of sublease space on the market at 200 Smith Ranch Road in San Rafael. Activision-Blizzard recently announced the closing down of a Novato location of approximately 15,000 square feet.

At the Hamilton Landing office complex in Novato, a new outdoor amenity area was completed and two of the submarket’s larger leases of 2023 were signed. Vionic Shoes leased approximately 22,000 square feet, and WX Brands leased approximately 12,000 square feet.

On the sales side, there were a number of office buildings that sold, some of which transacted for less than $200 a square foot. This is a result of decreasing office demand and higher interest rates. Investors saw an opportunity to purchase office buildings at pricing significantly below pre-pandemic pricing.

Here are a few notable sales in the past 12 months:

• 851 Irwin St., San Rafael: $115 a square foot
• 30 N. San Pedro Road, San Rafael: $257 a square foot
• 1682 Novato Blvd., Novato: $144 a square foot
• 7200 Redwood Blvd., Novato: $104 a square foot
• 523 Fourth St., San Rafael: $198 a square foot

We have also seen a handful of office buildings sell with the intention to demolish and convert the sites to housing as well as several owner user sales.

There were some positive signs last year, as the north Marin market saw a flurry of lease renewals. Many of those had short terms, given the uncertainty of future space needs. We have also seen an uptick in tour activity from life science companies and medical users.

In 2024, we anticipate more office sales at below pre-pandemic pricing and companies continuing to determine what return to office looks like for them.