Grubb & Ellis Co., which had the disposition assignment, confirmed the sale in an announcement did not name the parties involved or the negotiated price. The brokers involved, G&E EVP Edward Suharski and brokers Steven Golubchik and Seth McKinnon declined to confirm the information GlobeSt.com obtained from third parties but did comment on a general investment trend.
"We're seeing a tremendous amount of private capital coming into the market [whereas] institutional capital is mostly still on the sidelines," Suharski tells GlobeSt.com. "Private capital investors typically seek higher returns than institutions; now that they are able to achieve those returns private investors feel they can compete on pricing," especially when they bring all-cash offers that promise a quick close.
The Goethe Road asset is a 126,000-square-foot R&D/office building located within the master-planned South Bradshaw Business Center. Completed in 1997, the building is 100% leased to the State of California Dept. of Corrections through 2016 under an agreement that includes annual rent increases.
The Alameda property, completed in 2001, is 64,000-square-foot R&D/office building accessible via the newly constructed Ron Cowan Parkway on Interstate 880. It was 89% occupied at the time of sale but reportedly has a lot of near-term rollover risk. The major tenant is Singulex, a medical device start-up.
"We received interest from both private capital and institutional investors, but ultimately a private buyer was selected due to their offering structure and their quick close," Suharski says.
Based on local industry sources and offering information obtained by GlobeSt.com at the time 1000 Goethe road came to market in April, the property is believed to have sold for approximately $20 million or $158 per square-foot. Based on an expected 2010 NOI of $2.05 million, the price paid represents a capitalization rate of approximately 10%.
Given the $20-million price for the Sacramento asset, the Alameda property is believed to have traded for approximately $8 million or $127 per square foot. The price on this asset is believed to represent a cap rate of approximately 12%, according to local sources.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
