After being vacant for about a decade, a 74,009-square-foot office building on a prominent Marin County hilltop is now half spoken for, thanks to new leases with a rapidly growing outpatient surgery center and a maker of high-end audio speakers.
Marin Health Ventures LLC leased 17,280 square feet on the second floor of 1 Thorndale Drive in north San Rafael, and tenant improvements are underway for occupancy late this year. The tenant has been doing business as Marin Specialty Surgery Center in 5,000 square feet at 505 Sir Francis Drake Blvd. in Greenbrae for about 15 years, according to administrator Cory Hall. It’s an ambulatory outpatient surgery center, which means patients can be in and back home the same day.
The current facility focuses on orthopedic, urology and podiatry procedures, but the relocation to 1 Thorndale will allow for more of an emphasis on orthopedic procedures, with expansion into outpatient total-joint arthoplasty (replacement, etc.) and spine surgery, Hall said. The new facility will have three bigger operating rooms instead of the current two yet still have one procedure room. Currently, Greenbrae center completes about 330 procedures a month, totaling 3,375 last year.
“A lot of procedures now, particularly in orthopedics, can be transitioned to the outpatient ambulatory experience,” he said.
That shift has been helped by improved methods in surgery, preoperative and postoperative pain control, and anesthesia that allow more procedures to be done in an outpatient environment, Hall said. Avoiding hospital stays for otherwise healthy patients and employing modern procedures has allowed ambulatory surgery centers to save patients and health systems an average of 30% from the same work done in hospitals, he said.
Ownership of Marin Specialty Surgery Center is made up of about 20 physicians plus general partners Marin General Hospital and Surgical Care Affiliates, a Deerfield, Illinois-based company that operates more than 210 ambulatory surgery centers and surgical hospitals nationwide.
Leasing activity at 1 Thorndale also comes amid a change in management for the Sausalito-based family business that owns it. Skip Berg built Berg Holdings’ portfolio to over 2.7 million square feet, mostly in multifamily properties that have a total of more than 1,000 units, mostly in the Seattle area.
After a Santa Rosa portfolio sale in 2014, Berg Holdings now has just 1 Thorndale and 100,000-square-foot Marina Plaza office properties in the Bay Area.
Leasing activity at 1 Thorndale also comes amid a change in management for the Sausalito-based family business that owns it. Skip Berg built Berg Holdings’ portfolio over a 40-year career that included several notable local properties including what's now Sonoma Raceway, Hamilton Field Air Force Base as well as a portfolio of multifamily assets nationally, with a focus on the Seattle market.
After a Santa Rosa portfolio sale in 2014, Berg Holdings paired down it’s office holdings and now has two office buildings, 1 Thorndale and the 86,460-square-foot Marina Plaza on the Sausalito waterfront.
Currently the managing director of Berg Holdings is 28-year-old son Carlo Berg. Before going off to business school then learning real estate, he spent summers in the family business maintenance crew, helping to ready apartments for new tenants as they turned on an annual basis.
“It’s been wonderful working in the family business and continuing the legacy Dad created,” he said. “The surgery center and our team worked hard to get this deal done, and we’re both pleased and look forward to a great relationship for years to come. We thought it was a great matchup: A high-quality tenant for a high-quality building.”
Take a drone tour of 1 Thorndale
"Fly through" this unique San Rafael building in this video.