Top commercial real estate sales of 2005

Fireman’s Fund Insurance Co. headquarters

775-779 San Marin Drive, Novato Size: 710,330 square feet Price: $283.5 million Buyer: American Financial Realty Trust Seller: 777 & 775/779 San Marin Assocs.

The Deal: The San Marin Associates group is led by Walter Spieker Jr., who kept the property when his Spieker Properties merged with Equity Office Properties Trust in 2001. Mr. Spieker was looking to sell the property, and Fireman’s Fund had first dibs per its lease. The insurer, already scaled back from one of the three buildings in the campus, agreed to a sale to the nation’s go-to investor for financial institution commercial property. .

The high per-square-foot price of $400 results from averaging returns on Fireman’s Fund’s lease on the whole campus through 2018. .

 

Basin Street Properties portfolio

36 buildings in Novato, Petaluma and Santa Rosa Size: 1.43 million square feet, class A office Price: $270.4 million Buyer: Equity Office Properties Trust Seller: Basin Street Properties.

The Deal: Though not the largest North Bay sale this year, it will touch more businesses as Equity Office expands its local portfolio to 2.1 million square feet in more than 40 buildings. Starting with Basin Street President Matt White’s vision to target the immediate space needs of small businesses and build hotels, multifamily housing and more retail, Greg Moss of NAI/BT Commercial suggested a portfolio sale, and Cushman & Wakefield pitched the plan to several suitors. .

Others presented offers, but Equity Office moved more quickly to secure the portfolio that would link its southern Marin and Santa Rosa properties, providing room for businesses to grow in the portfolio. .

 

Rohnert Park casino land

Wilfred Avenue, Rohnert Park Size: 273 acres Price: $100 million Buyer: Station Casinos Seller: Redwood Equities.

The Deal: Having been thwarted in building a casino in San Pablo, the Federated Indians of Graton Rancheria sought other locations, even entertaining bay-front property at the southern tip of Sonoma County. .

Assembling west Rohnert Park properties over the past decade and a half, Dennis Hunter, James Ratto and Clem Carinalli sold them to Las Vegas-based casino developer and operator Station Casinos, a partner with the Graton Rancheria. .

 

Marin Technology Center

1600 Los Gamos Drive, San Rafael Size: 455,561 square feet Price: $90 million (est.) Buyer: Hines & GE Capital Corp. Seller: AMG Realty.

The Deal: Hines had been watching the Marin County market for an acquisition for some time because of limited ability to build new space and an improving economy, according to Senior Vice President Paul Paradis. George Lucas’ companies, some of which occupied half the facility, were moving to a new campus in the Presidio. .

Talk in the real estate community before and after the deal pointed toward redeveloping Marin’s second-largest commercial office building to include housing or even commercial condominiums. .

However, Hines has been pursuing leasing by adapting Equity Office’s use of speculative suites at San Rafael Corporate Center, a property Hines also acquired in June, to lease space quickly. Haden Ongaro of Orion Partners represented AMG in the sale. .

 

Agilent Technologies campus

4700 Valley House Road, Rohnert Park Size: 625,000 square feet, office; 200 acres Price: $38.5 million Buyer: Codding Investments Seller: Agilent Technologies.

The Deal: As it pared its Sonoma County workforce, Agilent Technologies hired Cushman & Wakefield in August 2004 to market the 200-acre campus at the southeast corner of the city for sale. Agilent received 14 offers from local to national firms and had three backup offers when it opened escrow with Codding that December and closed in March. .

Sean Heaton of Cushman & Wakefield attributes the high interest to the property being one of the last key opportunities for a developer to create a large business park. Codding plans to build a couple thousand homes on the vacant land, creating a mixed-use community called Sonoma Mountain Village. .

Codding still is looking to lease the vacant 350,000 square feet of office space in the building and has floated the idea of creating a business incubator as well as providing a smaller, leased home for State Farm Insurance’s Rohnert Park office. .

 

San Rafael Corporate Center

Second Ave. & Lindaro Street, San Rafael Size: 155,300 square feet, class A office Price: $35 million (est.) Buyer: Sterling American Property & Hines Seller: Equity Office Properties Trust.

The Deal: There's nothing like a pending sale in motivating deal-making. .

Equity Office signed 40,000 square feet of leases prior to the June sale of the two-building complex, taking the property from 40 percent occupied to 60 percent by the time of the late June sale. .

Part of the complex was planned to be a headquarters campus site for Fair Isaac. But the property was completed around the time of the dot-com slowdown in demand for large blocks of top-quality office space. .

The property received more than 30 offers when it went before suitors around the beginning of the year and had a half-dozen finalists in June. .

On the heels of its joint acquisition of Marin Technology Center in San Rafael in late May, Hines brought one of its other venture partners in on the corporate center purchase. .

 

1465 N. McDowell Blvd., Santa Rosa

Size: 140,000 square feet, industrial Price: $32.25 million Buyer: CRP Holdings A LP Seller: TCP Petaluma LLC.

The Deal: Denis Plehn of Orion Partners negotiated a handsome price of about $230 a square foot for the former headquarters of Advanced Fibre Communications, now part of Tellabs. .

 

Nave Bowl site

8500 Nave Drive, Novato Size: 8.85 acres Price: $17.5 million Buyer: Grosvenor Seller: Albertsons

The Deal: Albertsons approached NAI/BT Commercial about the sale of a neighborhood shopping center site in Novato after the real estate firm had garnered 38 offers and a whopping $70 million in the bid-sale of the 155,000-square-foot Strawberry Village Shopping Center in Mill Valley in June 2004.

A bid for the Novato property opened in January among 200 prospects, and several met with city officials about what they wanted to see built at the site. Albertsons received 18 offers in March. On top was United Kingdom-based Grosvenor, which owns $8.6 billion in real estate in 16 countries.

Grosvenor has signed up Safeway as the 50,000-square-foot anchor of a 105,000-square-foot center called Hamilton Gateway.

 

Legacy Marketing Group headquarters

2090 Marina Ave., Petaluma Size: 71,612 square feet, office Price: $13.1 million (est.) Buyer: Basin Street Properties Seller: Regan Holding Corp.

The Deal: Basin Street built the 72,000-square-foot Lakeville Corporate Center for insurance marketer Legacy in 1999 and sold it to the company in 2000.

As Legacy faced declining revenues, the company sold the building back to Basin Street in mid-November and signed a 10-year lease. For the first 18 months, Legacy will occupy all of the building, then it will take 35,000 to 52,000 square feet for the rest of the term.

 

Golden Eagle Shopping Center

2-80 E. Washington St., Petaluma Size: 71,000 square feet Price: $13 million (est.) Buyer: Basin Street Properties Seller: Walter Kieckhefer Co. LLC

The Deal: Reinvesting more of its proceeds from the currently $260.5 million portfolio sale to Equity Office Properties Trust, in November Basin Street acquired the Grocery Outlet-anchored neighborhood center across the Petaluma River from its $100 million Theater District redevelopment project.

Basin Street has talked about sprucing up the 35-year-old center initially. Some long-range ideas for the center include second-story housing, a hotel and a pedestrian connection with the theaters across the river.

 

3033 Cleveland Blvd., Santa Rosa

Size: 105,000 square feet, office Price: $12.5 million Buyer: Redwood Credit Union Seller: STG Group

The Deal: Former NAI/BT Commercial agent Craig Cosentino got to talking last year with Redwood CFO Steve Stapp at a Santa Rosa open house by interior design firm Kyoob, which has been remaking the retail image of the credit union. Mr. Cosentino told Mr. Stapp about 3033 Cleveland, which NAI/BT was marketing for Santa Rosa-based STG Group.

At the time, Redwood had been searching for about a year for a place to consolidate its Santa Rosa offices and had entered escrow with Seattle-based Washington Mutual for its 105,000-square-foot office building fronting U.S. 101 at 3883 Airway Drive, another NAI/BT listing. Redwood decided not to go through with the sale, and the Airway building sold to Nearon Enterprises in late December.

Redwood will soon occupy 60,000 square feet in 3033 Cleveland and will expand into the rest as leases expire.

 

831 & 841 Latour Court, Napa

Size: 61,000 square feet, office Price: $9 million Buyer: Jaeger-McHugh LLC Seller: Frederick & Alma Tudal Trust

The Deal: Signed in October, this deal was one of two Napa Valley commercial property acquisitions totaling $13.73 million this fall by San Francisco-based investor group Jaeger-McHugh. Cushman & Wakefield brokered both sides of the deals, which also included a leased 36,000-square-foot multitenant industrial building at 1901 N. Kelley Road at Highway 29.

The Latour Court buildings were the headquarters of Robert Mondavi Corp., whose Napa Valley workforce has been pared by several hundred this year following last December's acquisition by Constellation Brands. A few businesses have leased the first building, and the second has 21,000 square feet in deals pending.

 

1 Digital Drive, Novato

Size: 51,365 square feet, industrial Price: $8.5 million Buyer: Flaming Properties Seller: Morton & Marcine Friedman Family Trust, etc.

The Deal: Peter Gettner of H&L Commercial had been showing Sutter Instrument Corp. President Dale Flaming expansion and consolidation space as far north as Petaluma for three years before Mr. Flaming settled on a former Harris Digital Telephone building for his 50-employee biomedical research equipment company. Haden Ongaro of Orion Partners was marketing the building.

 

The Terraces

90 E Street, Santa Rosa Size: 36,000 square feet, class A office Price: $6.62 million Buyer: Hardip “Raj” Gulati & Billa Management LLC Seller: Phoenix Properties GP

The Deal: Raj Gulati acquired the building, 26,000 square feet of which was vacant, with plans to renovate the two-decade-old building and attract tenants.

 

3121 N. Laughlin Road, Santa Rosa

Size: 19.5 acres, industrial Price: $5.3 million Buyer: Liquid Investments Inc. Seller: Vista LLC

The Deal: In late November, Liquid bought the land south of Westwind Business Park near Sonoma County Airport for a larger distribution facility for its Mesa Beverage business currently located less than a mile away. Mike Flitner and Jim Sartain of Keegan & Coppin represented Vista, and Preston Smith of Orion Partners represented Liquid.

 

Top commercial leases of 2005

Airport Corporate Center

3910 Brickway Blvd., Santa Rosa Size: 110,250 square feet, R&D Term: Five years Tenant: Boston Scientific/TriVascular Landlord: Equity Office Properties Trust

The Deal: This is the largest lease not only of this year but also since the turn-of-the-century tech bust. The medical-device maker had grown from 65 employees to 275-plus packed into 36,000 square feet in Westwind Business Park.

JDS Uniphase courted the company for a 150,000-square-foot mostly vacant research-and-development building at its southwest Santa Rosa campus. Codding Enterprises wooed TriVascular for the 350,000 square feet of vacant space at the former Agilent Technologies campus in Rohnert Park.

In the end, TriVascular co-founder and President Michael Chobotov opted to lease an existing building in another vacant Agilent campus near the Charles M. Schulz–Sonoma County Airport because of the potential for commercial air service and access to rest of the country. Keegan & Coppin represented TriVascular in the site search. Cushman & Wakefield brokered a lease-buyout deal between Agilent and developer Panattoni then the direct deal with Boston Scientific.

 

170 Todd Road, Santa Rosa

Size: 84,980 square feet, retail/industrial Term: Five years Tenant: Cal RV Supercenter Landlord: Todd Associates

The Deal: This large lease put a fine finish on the former Hosokawa Bepex plant in southwest Santa Rosa, which the current owner eventually plans to transform into a mixed-use development fronting Highway 101.

Paul Gonzalez of NAI/BT Commercial helped the partners find a location with enough clear space for an indoor RV showroom and adjacent industrial space for service bays. Jim Sartain of Keegan & Coppin has been leasing the 135,000-square-foot facility and only has 5,000 square feet of office space available there.

 

Airport Corporate Center

3850 Brickway Blvd., Santa Rosa Size: 62,865 square feet, office Term: Five years Tenant: Medtronic Vascular Landlord: Equity Office Properties Trust

The Deal: Though smaller than the TriVascular lease in the same complex, the Medtronic full-building lease in March was the first major lease-up of the vacant former Agilent Technologies four-building campus near the Sonoma County Airport. It was also significant because it signaled a major upswing in the local operations of biotechnology companies.

Medtronic Vascular was expanding operations overseas but decided to consolidate facilities locally, moving 160 employees to the building. Medtronic has been eyeing the building's twin next door to house the 350 workers it intends to hire locally through spring.

Paul Schwartz of Orion Partners and CRESA represented Medtronic in the deal, and Sean Heaton of Cushman & Wakefield negotiated Agilent's buyout of its lease and a direct deal with Basin Street Properties.

Basin Street bought that building and an identical one next door from Panattoni then sold them as part of the portfolio sale to Equity Office Properties Trust this summer.

 

5600 State Farm Drive, Rohnert Park

Size: 59,026 square feet Term: Five years Tenant: O'Hagin's Inc. Landlord: Waldman Management

The Deal: Sonoma County kept 50 manufacturing jobs when O'Hagin's was able to find inexpensive industrial space for its expansion from Sebastopol. CEO David Mutter credited prompt responses from Rohnert Park planning officials to permit submissions and questions about O'Hagin's remaining in the county and California.

The company has a plant in Florida. Steve Leonard and Trevor Buck of Meridian Commercial and Mike Flitner of Keegan & Coppin represented Waldman, and Jim Sartain represented O'Hagin's.

 

Hamilton Gateway

8500 Nave Drive, Novato Size: 50,000 square feet Tenant: Safeway Landlord: Grosvenor

The Deal: This November lease kicked off the entitlement process for a 105,000-square-foot neighborhood center to replace a former bowling alley near the burgeoning Hamilton redevelopment neighborhood in southeast Novato. The deal comes as two other Novato redevelopment projects – Pini Mill & Depot and The Village at Novato – landed Whole Foods Market and Trader Joe's, respectively.

 

Pini Mill & Depot

790 DeLong Ave., Novato Size: 45,000 square feet, retail Tenant: Whole Foods Market Landlord: Lelanne Group

The Deal: Residents of Novato are known for protesting new developments, often with ballot measures. So, it was unusual to have a group get together to pepper the natural foods grocer with numerous letters asking for the retailer to establish a store there. Whole Foods nearest stores are in Petaluma and Mill Valley.

The store is planned to anchor a 3.5-acre mixed-use redevelopment called Pini Mill & Depot by the San Francisco-based developers Lelanne Group and Signature Properties. The small site has called for incorporating a parking garage and housing into the $35 million project.

 

632 Irwin St., San Rafael

Size: 36,000 square feet Tenant: Best Buy Landlord: James & Nancy Hill Derryberry

The Deal: Mid last year, electronics retailer Circuit City took the first crack at redeveloping the 78,000-square-foot former home of laboratory supplies maker Labcon, which moved to Petaluma in December 2003. Then Haden Ongaro and Brad Yust of Orion Partners brought Best Buy to developer James Derryberry of Sonoma. The re-entitlement process on the property for a store started in April. Cornish & Carey represented Best Buy in the lease deal.

 

3925 Cypress Drive, Petaluma

Size: 34,422 square feet Tenant: PhotoTLC Landlord: RNM Properties

The Deal: The photograph restoration outsourcing company followed the historical progression of North Bay company growth when it started in southern Marin, expanded to Novato then relocated its 60 employees to Petaluma, according to Greg Moss of NAI/BT Commercial. NAI/BT represented PhotoTLC, and Meridian Commercial represented RNM.

 

2235 Mercury Way, #275, Santa Rosa

Size: 32,000 square feet, class A office Term: Six years Subtenant: Transworld Systems Master tenant: Nokia Inc.

The Deal: After 35 years in Rohnert Park, bad-debt servicer Transworld Systems moved to southwest Santa Rosa and took a substantial block of the 92,000 square feet telecom systems maker Nokia vacated when it left the area in 2002. Only a few thousand square feet of the Nokia space remains to sublease, and Nokia's lease on the space runs through December 2007, according to Cushman & Wakefield, which is marketing its space.

What made the difference in subleasing that space was the flexibility the building owners gave Nokia in signing deals. Also, the December 2003 lease of 17,000 square feet to E-myth allowed the construction of a partial corridor. Thus, the building could accommodate tenants as small as 3,000 square feet.

John Leydecker of Keegan & Coppin represented Transworld in the lease as well as the sale of two office buildings and a warehouse in Rohnert Park.

 

McDowell Business Center

1039 N. McDowell Blvd., Petaluma Size: 29,000 square feet, class A office Term: 20 years Tenant: ABD Insurance & Financial Services Landlord: RNM Properties

The Deal: Just a few months after Petaluma telecommunications startup Mahi Networks finally left its 50,000-square-foot offices for a smaller venue in New Jersey, ABD has leased more than half of the space to accommodate 30 more employees in the next five years. ABD will vacate 18,000 square feet on three floors when it moves from Petaluma Marina Office Center in mid-2006.

 

The Vines

2511 Napa Valley Corporate Drive, Napa Size: 24,118 square feet, industrial Term: 10 years Tenant: Bergin Glass Impressions Landlord: Bedford Property Investors

The Deal: Lafayette-based Bedford, which owns more than 300,000 square feet in Napa Valley Corporate Park, had planned to build a two-building, 52,000-square-foot office and industrial complex speculatively, according to project marketing agent Matt Bracco of Cushman & Wakefield. However, wine bottle decorator Bergin needed to consolidate its operations, which were inefficiently spread across a few buildings, and have room for large new pieces of equipment.

Thus, the Bergin lease kicked off Bedford's first new Napa development in four years. Bedford's head of acquisitions, Anne Hoffman, said the recent spate of consolidations of large wine companies has made office development in the south Napa business parks more uncertain.

 

88 Rowland Way, Ste. 200, Novato

Size: 22,500 square feet Term: Five years Tenant: Pro30 Mortgage

The Deal: In the largest new Marin lease of the year, Pro30 absorbed space left vacant by QuantumShift. Pro30 expanded from 18,000 square feet at 350 Ignacio Blvd., a three-story, 50,000-square-foot building in Novato. Meridian Commercial brokered the Pro30 lease.

 

Woodside Office Center

7250 Redwood Blvd., Novato Size: 15,000 square feet, class A office Tenant: Hennessey Funds Landlord: Equity Office Properties Trust

The Deal: Following the July acquisition of $299 million in assets related to the management contract for The Henlopen Fund, Hennessey Funds expanded by 6,000 square feet in a move from The Courtyard Square, 750 Grant Ave., Novato. Meridian Commercial brokered the lease.

The Nov. 1 lease capped leasing at Basin Street Properties' 89,000-square-foot Woodside Office Center in time for Equity Office's acquisition of the property as part of a $270.4 million office portfolio purchase.

 

The Village at Novato

7533 Redwood Blvd., Novato Size: 15,000 square feet Tenant: Trader Joe’s Landlord: The Prado Group

The Deal: Similar to the Whole Foods Market deal at Pini Mill & Depot in Novato, residents petitioned the Monrovia-based specialty foods retailer to open a store in Novato so they wouldn't have to drive to the nearest ones in Petaluma or San Rafael.

The store deal anchors a downtown redevelopment project called The Village at Novato, which currently is slated to have 88,000 square feet of retail space but could have much more. It is one of four sites the city has identified as key to keeping more than $700 million in retail dollars a year from going to surrounding cities. John Shaefer of NAI/BT Commercial is marketing The Village.

 

208 Concourse Blvd., Santa Rosa

Size: 15,000 square feet, medical office Term: 15 years with purchase option Tenant: 208 Concourse, LLC Landlord: Airport Business Center

The Deal: Mark Archambault, operator of sports physical therapy clinic BacktoGolf Performance & Fitness in Windsor, teamed with Redwood Orthopedic Surgery Associates in Santa Rosa to lease the first of three medical office buildings totaling 60,000 square feet. Their building is under construction and slated for completion in fall 2006.