Basin Street Properties sells most of portfolio to Equity Office for $263 million

PETALUMA - Basin Street Properties, which helped usher in the telecommunications boom in Sonoma County, is selling off its remaining buildings in the heart of Petaluma's Telecom Valley as well as a broad portfolio of other holdings in Santa Rosa and Novato

The $263 million sale to commercial real estate giant Chicago-based Equity Office Properties Trust (NYSE:EOP) is the largest commercial real estate sale ever in the North Bay, dwarfing Codding Investments' purchase in March of 700,000-square-foot Rohnert Park campus from Agilent Technologies for $40 million.

The deal involves 1.4 million square feet of office space, including about 500,000 square feet in 13 buildings Basin Street still owned in Petaluma's Redwood Business Park. Basin Street is keeping its downtown Petaluma and Napa holdings.

Also included in the deal are six developments in Santa Rosa and two in Novato:

* Airport Corporate Center, 127,440 square feet in two buildings at 3850 and 3880 Brickyard Boulevard near Charles M. Schulz-Sonoma County Airport. Basin Street recently purchased them from Panattoni Development then leased 60,000sf of the vacant buildings to Medtronic.

* Golden Gate Plaza, 115,000 square feet in two buildings at 100 and 101 Rowland Way in Novato.

* McDowell Corporate Campus, a 53,974 square foot office/R&D building at 1179 North McDowell Boulevard in Petaluma.

* Three of the five buildings at Oak Valley Business Center on Aviation Boulevard also near Sonoma County Airport.

* Parkpoint Business Center has 67,869 square feet five buildings at North Dutton and West College avenues in Santa Rosa. Basin Street acquired it from Lafayette-based real estate investment trust Bedford Property Investors.

* The Lakes, with 136,000 square feet in five buildings at 2225 Challenger Way in Santa Rosa.

* Waterfall Towers, 2455 Bennett Valley Road, Santa Rosa, 90,500 square feet in three buildings.

* Woodside Office Center, 7250 Redwood Boulevard, Novato, 89,000 square feet in one building.

Basin Street is keeping its Napa portfolio as well as Sonoma County projects in development, namely the $120 million Theater District mixed-use redevelopment of downtown Petaluma.

About a quarter-century ago, Bill White co-founded G&W Management and started Redwood Business Park. In the 1980s and 1990s, he helped kick-start what later became known as Telecom Valley by providing space startup companies with initial and expansion space for a growing hub of telecommunications equipment developers.

When Mr. White's son, Matt, took the reins as company president in 2001, he changed the name to Basin Street Properties and embarked on a new direction for the company as well as downtown Petaluma.

As for Equity Office, it is fresh off a $329 million sale late last month of a 1.36 million-square-foot Bay Area portfolio to a joint venture of Sterling American and Hines. That deal included the 155,300-square-foot San Rafael Corporate Center.

Currently, Equity Office is selling nonstrategic assets and shifting its investments to growth markets, according to a June 30 statement by president and CEO Richard Kincaid. So far this year, the company has sold 60 assets, mostly in California, for $1.6 billion and expects total sales this year to be $2 billion to $3 billion.

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