At the close of 2016, the overall office space availability rate in north San Rafael and Novato stood at 19.6 percent and 36.1 percent, respectively. In north San Rafael, 35.3 percent of the availability was due to sublease space, while in Novato, 67.0 percent was for sublease.
The overall Marin County availability rate stood at 19.9 percent, with sublease space contributing to almost half of that rate, comprising 48.8 percent of the available space.
The departure of Fireman’s Fund Insurance Company, now Allianz, from Novato in the beginning of 2016 to Petaluma contributed to an increase of city’s overall availability by 14.5 percentage points. The availability rate rose from 22.1 percent in the fourth quarter of 2015 to 36.6 percent in the first quarter of 2016.
Fireman’s Fund’s former 710,330-square-foot campus at 773–777 San Marin Drive currently has 102,674 square feet of subtenants, leaving 607,656 square feet available for sublease.
Several other subleases became available in the north Marin office market in 2016 and early 2017. Most notably, Fair Isaac Corp. is offering the entire 124,196-square-foot building at 200 Smith Ranch Road in north San Rafael for sublease. At the Hamilton Landing office complex in Novato, TouchFactor Inc. is offering its 10,876 square feet, while Raptor Pharmaceutical will be offering its 60,979 square feet there.
This increase in available sublease space is part of a larger trend seen across the Bay Area.
SIZABLE LEASES AND RENEWALS
Despite the increase in sublease space, several significant northern Marin tenants renewed and expanded leases in 2016 and early 2017, most notably in Novato. In February of last year, ExecRank Inc. expanded by 11,583 square feet at 4 Hamilton Landing, to now occupy 20,307 square feet in the development. In April, Radiant Logic Inc. renewed its lease of 9,962 square feet at 75 Rowland Way and expanded by 3,763 square feet, now totaling 13,725 square feet. In May, BioMarin Pharmaceutical Inc. renewed for 42,710 square feet at 100 Wood Hollow Drive, and in June, Marin Medical Practice Concepts renewed its lease of 13,886 square feet in the same building. In January of this year at 5 Hamilton Landing, Marin Community Foundation renewed for 31,705 square feet and expanded by an additional 4,547 square feet, now totaling 36,252 square feet.
MULTIPLE OFFERS AND USER SALES
There also were several significant northern Marin sales. The most prominent was north San Rafael’s 3900–3950 Civic Center Drive. Totaling 93,535 square feet, it sold for $300 per square foot in March 2016. In May, 101 Lucas Valley Road in north San Rafael sold for $237 per square foot.
In November, Marin Community Foundation sold two office buildings: 30 N. San Pedro Road with 24,485 square feet at $262 per square foot and 555 Northgate Drive with 23,358 square feet at $233 per square foot. Both properties attracted multiple offers for above their asking prices.
In central San Rafael, CellMark Inc. sold its former 31,577-square-foot headquarters at 22 Pelican Way for $396 per square foot in November. The buyer was EAH Inc., which is moving from 21,366 square feet nearby at 2169–2173 E. Francisco Blvd. After the sale, CellMark relocated to 88 Rowland Way in Novato, leasing 19,650 square feet in December.
RENTS FIRM UP
There has been continued tenant activity in northern Marin. Several class A office buildings are undergoing renovations including upgrading lobbies, landscaping and exterior painting. Examples are 4000 Civic Center Drive in San Rafael, and Novato’s 75–88 Rowland Way and 100 Wood Hollow Drive.