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CarrAmerica Sells 81% of 1M-SF Center for $160M

PLEASANTON, CA-The property, CarrAmerica Corporate Center, is 85% leased to the likes of AT&T, Peoplesoft, Safeway and Pacific Bell Mobile Services.

By Brian K. Miller | Updated on April 07, 2005

PLEASANTON, CA-CarrAmerica Realty Corporation has sold an 81% interest in the 1.04 million-sf CarrAmerica Corporate Center here for $160 million. The Washington, DC-based REIT retains a 19% interest and will continue to manage and lease the property. The new majority owner is Rreef.The property is 85% leased. Tenants include AT&T (36%), Peoplesoft, Inc. (18%), Safeway, Inc. (15%), Pacific Bell Mobile Services (14%). According to CarrAmerica’s annual report, the total annualized GAAP base rent from the property is $19.93 million and the average rent is $22.92 per sf per year. As part of the deal, CarrAmerica had to deposit about $3.6 million into a TI allowance escrow to pay for previous commitments to Safeway, AT&T and Ross Stores, according to SEC filings.Located in the Hacienda Business Park, CarrAmerica Corporate Center is comprised of seven buildings, six office buildings and a seven-room conference center. The property was valued at $197.3 million for transaction. CarrAmerica received approximately $154 million in net proceeds and will record a gain of approximately $77 million in connection with the sale.CarrAmerica’s Northern California managing director Chris Peatross says the capital from the sale will be redistributed in the San Francisco Bay Area and other markets. In Northern California, CarrAmerica owns, directly or through joint ventures, interests in 85 office and R&D buildings containing approximately 6.3 million sf. Nationwide, the numbers are 26 million sf in 286 properties.

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