Crown Corporate Center Trades for $24M

SACRAMENTO-Crown Corporate Center has changed hands for $24 million. An affiliate of South Pasadena, CA-based Edgewood Realty Partners LLC acquired the 117,000-sf class A office building here from BTV Crown Equities, which will continue to manage the property. The sale closed earlier this month.Completed in 2003, the four-story Crown Corporate Center sits at the confluence of Interstate 5 and 80. The site address is 2860 Gateway Oaks Dr. The anchor tenant is the University of Phoenix, which occupies the first two floors. Edgewood Realty Partners principal Joe McNulty tells GlobeSt.com the third floor is vacant, but the rent is being guaranteed by the seller for up to five years. The seller also guaranteed rent for the fourth floor as well, he says, but during escrow it was leased to the Judicial Council of the State of California, which will take occupancy after tenant improvements are complete later this summer. CBRE has the leasing assignment. McNulty tells GlobeSt.com the acquisition was financed with a 75% loan and will be held long term. The true cap rate on the investment is 8%, he says, and the cash-on-cash return to investors starts at 9%. The sale was brokered by Randy Getz at CB Richard Ellis. Founded last year, Edgewood Realty Partners invests on behalf of itself and high-net-worth individuals, families and trusts. McNulty’s prior experience includes 15 years managing the West Coast real estate practice of Deloitte & Touche. His partner, Pete Kutzer, manages Kutzer Company, a property management company in South Pasadena. Crown Corporate Center is their first acquisition in the Sacramento market.”As a practically brand new asset with a secure tenant base, Crown Corporate Center is typical of the type of investment we like to make,” says McNulty. “Our strategy is to aim just below the institutional investor; they will not pursue a $24-million building; however, from an investment standpoint, this is as good as you are going to get.”