SAN MATEO, CA—The San Mateo market continues to benefit from its central location between San Francisco and Silicon Valley. According to Cushman & Wakefield research, San Mateo's office vacancy dipped below 10% at the close of 2015. Average asking office rents in the submarket have grown 24% in the last two years.
Within this vibrant market, a strategically located property has changed ownership. Seagate Properties Inc. partnered with RGA Real Estate Investments LLC in the acquisition of The Atrium for $61.6 million or $376 per square foot. Located at 1900 South Norfolk St., the class-A office building is situated at the prominent intersection of Highway 101 and 92. The Atrium totals 163,791 square feet and is 90% occupied.
Brian Johnson, vice president of acquisitions at Seagate Properties, tells Globest.com, "The updated courtyard is a very attractive and inviting gathering area for the tenants at the property."
The largest tenant in the property is Prometheus Real Estate Group, the largest private owner of multifamily properties in the Bay Area. Included in the purchase is a .9 acre development site with excellent visibility on South Norfolk Street.
Seagate and RGA formed the joint venture to secure The Atrium from Prometheus, the building's original developer. The Atrium's location on a key interchange in San Mateo was a big draw for Seagate. The property sits 20 miles south of San Francisco and 15 miles north of Stanford University. It boasts excellent access to the East Bay via Highway 92 and also benefits from proximity to San Mateo and Caltrain.
Built in 1983, the three-story aluminum and glass clad office building is designed around an open-air atrium, which was recently transformed in a $300,000 renovation and serves as a central gathering area for tenants, complete with Wi-Fi, new hardscape, updated water feature and modern furniture. Other recent capital improvements include new signage, lighting and the installation of an EV charging station. Seagate plans to continue with upgrades to the property and tenant spaces in order to lease up the current vacancy and retain existing tenants as leases expire.
"The Atrium presents itself as prime office space with a diverse mix of tenants," said Johnson. "The property has been very well maintained and its proximity to major thoroughfares and Caltrain were key considerations for us.
Steve Herman, Eric Fox and Bob Gilley of Cushman & Wakefield represented the seller in the transaction and Kurt Scheidt and Terry Daly with Cushman & Wakefield Mortgage Services, provided loan brokerage services to the buyer. Steven Hinds and Peter Ryan of George Elkins Mortgage Bank facilitated the joint venture between Seagate and RGA. Mike Moran, Ben Paul and Pat Jaeger of Cushman & Wakefield will lease the property for Seagate and RGA.
As previously reported, Prometheus Real Estate Group received financing for The Markham Apartments in Cupertino, CA.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
