Novato office building sells for $16.25M
Eight months after buying a 130,000-square-foot San Rafael office building, a San Francisco-based commercial property developer and investor is back, purchasing an 87,000-square-foot Novato office building.
Mach II Woodside, LLC, an affiliate of Ellis Partners, bought Woodside Office Center at 7250 Redwood Blvd. on July 9 from CA-Woodside Office Center, LP, affiliated with Chicago-based Equity Office. The sale price wasn’t disclosed, but property value used to figure the county document transfer tax was $16.25 million.
The three-story class A building was 85 percent occupied when sold, according to JLL Capital Markets, whose agents Michel Seifer, Rob Hielscher, Erik Hanson and Dan Renz represented the seller along with Whitney Strotz of DTZ in San Rafael. Notable among the mix of professional services and technology tenants is Hennessey Advisors and its related companies.
Basin Street Properties built Woodside in 2003 and sold it to Equity Office in 2005 as part of a 44-building, $263 million portfolio in Sonoma and Marin counties.
Equity Office has been selling off or otherwise divesting of its North Bay holdings since 2011 and now only has the 112,000-square-foot Harbor Drive Executive Park in Sausalito and the 200,000-square-foot Larkspur Landing Office Park in Larkspur. In the past year and a half, Equity Office sold 122,000-square-foot Drakes Landing in Greenbrae, 99,000-square-foot Shoreline Office Center in Mill Valley and 82,000-square-foot Wood Island in Larkspur.
Ellis-led Mach II 4040, LLC, purchased 4040 Civic Center Dr. from Los Angeles-based real estate investment trust Kilroy Realty, LP, on Oct. 31 for $34.9 million.
At the time, managing partner Jim Ellis told the Business Journal that now’s the time to invest in Marin County real estate. He said the trends of companies leaving San Francisco for less expensive office space nearer to top executives’ homes and decreasing Marin office vacancy because of the rapid growth of companies such as BioMarin Pharmaceutical in downtown San Rafael.
“We like Marin in terms of its supply constraints,” said Jason Morehouse, partner and director of acquisitions, pointing to challenges in building sizable office projects in the county. “This building was the best in Novato, with a vintage in 2003 and nearby amenities.”
Nearby services for executives and employees have become of particular importance for Bay Area tenants recently, according to Morehouse. Woodside has Novato Fair Shopping Center across the street and newly revitalized downtown retail close by, he noted.
Ellis Partners has a portfolio of 4.3 million square feet of office, retail, industrial and urban mixed-use properties, concentrated around the greater Bay Area. With development partner Simons & Woodard, Ellis built about 1 million square feet of industrial and office space in southwest Santa Rosa from the late 1990s until four years ago.
The recent string of sizable Marin office properties is a sign that the frenzy of investor activity in San Francisco and high-technology areas to the south is starting to shift north, Morehouse said.
“Marin has lagged in the office recovery and capital market interest,” he said.
Ellis Partners has a long-term hold plan for the Marin properties and wants to work with local business owners to accommodate their needs, Morehouse said.
DTZ agents will continue to market Woodside Office Center for lease, and the company is taking over property management. JLL agents also brokered the previous Equity Office sales in Marin.
CORRECTION, Aug. 31, 2015: The $19.7 million purchase price in the original story was incorrectly based on the full documentary tax and not just the county portion that's based on the sale value.