Westcore CEO Donald Ankeny says the 75%-occupied portfolio was a value-add play for the company and the company had accomplished its objectives by renovating common areas, raising occupancy, preparing vacant space for quick move-ins and dealing with "a fair amount" of near-term rollover. "We…felt that the time was right to sell a sizeable amount of our Bay Area holdings," he says. "We plan to re-invest some of the capital into other properties in the Northern California region as well as key markets throughout the western states."
In the coming days and weeks, Westcore will be acquiring two portfolios from publicly held Mack-Cali Realty Corp. for a total cost of about $320 million. Over the next 12 months, Ankeny projects that the company will continue its rapid growth by acquiring in excess of $750 million in assets. In addition to large, institutional-grade portfolios, Ankeny says the company will be acquiring single core-plus and value-add assets.
Westcore expects to close tomorrow on a 1.4-million-sf portfolio of office and office-flex buildings in Denver from Mack-Cali for $194.3 million. The portfolio includes 19 buildings that are 94% occupied plus 7.1 acres of vacant land and 1.6 acres of land dedicated to a parking facility. Ankeny tells GlobeSt.com the company expects to benefit from increasing rental rates in the recovering market. "Denver is interesting in that rents for flex-office space are very close to more conventional office product."
Westcore is also acquiring from Mack-Cali a 455,000-sf portfolio of two mid-rise office buildings in Downtown San Francisco for $126 million. The buildings, 760 Market St. and 795 Folsom St., are about 85% occupied. The sale is scheduled to close on Dec. 22. Ankeny says the Market Street building is located between the new Westfield San Francisco Centre and Union Square and has a significant retail component that Westcore sees as a value-add opportunity. The other building had been slated for a conversion to residential condominiums, but Ankeny says he's "not sure the residential market is very hot for that."
Eastdil Secured represented Westcore in the disposition of its Silicon Valley portfolio. Key buildings within the portfolio include:
- Vasona Technology Park, a seven-building, one- and two-story office project totaling 306,334 sf in Campbell. The buildings are located in the 200 block of East Hacienda Avenue and the 1300 block of Dell Avenue.
- Warm Springs Business Center, a four-building, one-story multi-tenant industrial/flex project totaling 146,592 sf in Fremont. The buildings are located in the 48000 block of Warm Springs Boulevard.
- A two-building, one- and two-story R&D and office project totaling 115,887 sf in San Jose. The buildings are located at 1717 & 1751 Fox Dr.
- A two-story office project, totaling 38,648 sf at 393 Vintage Park Dr. in Foster City.
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