PacWest Makes Largest Sacramento Office Purchase in 5 Years With $117M Deal
Over the past 25 years, occupancy has been nearly 90%.
PacWest Equities has struck a deal to acquire a Class A office property in Sacramento for $117 million from Manulife US REIT.
JLL, which brokered the deal on behalf of the seller, said in a statement that the transaction was “the largest office sale in almost five years” in the city.
In addition, the real estate firm said that the building called 400 Capitol Mall, maintained “nearly 90% historical occupancy over the past 25 years.” And in the past four years, 232,000 square feet of leases have been signed. Some major tenants at 400 Capitol include Morgan Stanley, Wells Fargo, Orrick, PWC, and Deloitte.
In total, the 29-story site measures 501,308 square feet and offers a fitness center, valet parking, car detailing, an outdoor pool, a restaurant and cafe, and a conference center. Plus, the parking garage, which stands five stories, holds almost 1,100 spots.
“The sale of 400 Capitol Mall not only represents a significant investment in Sacramento’s office market, but further exemplifies the flight to quality trend and the divergence between top-tier and lower-quality assets in the current market landscape.” JLL managing director Adam Lasoff said.
As office continues to recover from the pandemic lows, Class A properties are performing much better than B’s and C’s. The top-end amenities are driving some workers back to the office. Class A offices typically have lower vacancies and higher rents compared with lower-tier ones.
And while offices are trading at lower prices than they did before the pandemic, the costs tend to be higher in Western markets. Notably, San Francisco continues to be one of the most expensive markets in the country for office, with average asking rents of $67.33 per square foot in the third quarter, according to a report from Commercial Edge. The city lagged slightly behind Manhttan’s $67.93 per square foot median.