"A lot of our plays are value-added and this does lean more to core," Sterling's SVP of asset management Robert Bergman tells GlobeSt.com. "We have been looking at some longer term stable opportunities in growing markets such as Sacramento."

Designed by DMJM and completed in 1984, 300 Capitol Mall sits in close proximity to the state capitol and other government offices. Westfield Downtown Plaza and Interstate 5 are both one block from the property. Amenities include an attached 761-car garage and city and river views. Hines will assume the on-site property management responsibilities for the building.

The largest tenants are the California State Controller's Office (134,417 sf) and the California Department of Insurance (79,978 sf), according to Greg Sandin with the state's Real Estate Services unit. Other state agencies there include the Department of Finance (19,869 sf), the Office of Administrative Law (8,797 sf), the Office of State Health Planning and Development (6,941 sf), and the state department of Alcohol Beverage Control (2,770 sf).The state's lease rates range from $2.58 per sf for Finance department's space to $3.38 per sf for the space lease by the Office of Administrative Law, Sandin tells GlobeSt.com. The Controller's lease at $2.76 per sf was recently extended through 2012, and the Insurance department's lease at $2.76 per sf was recently expanded and extended through 2011, according to Jones Lang LaSalle, which handled leasing and property management for the seller and will retain the leasing assignment for the Sterling-Hines JV. A recently added non-government tenant is Microsoft Corp., which leased first-floor space for sales, support and training of clients, including the state.