Northbay Commercial Real Estate Simplified

Busy Quarter for Marin Office Market

Newmark Marin Second Quarter 2019[12050]

Click here for full report.

250,000 SF Office/R&D Development Available

REDWOOD_BLVD_MARKETINGDevelopment opportunities for easily accessible office/R&D are rare Bay Area-wide.  With supportive city policy and SMART Rail providing public transportation nearby, San Marin Business Park is worth a strong look.  Please click link below for details and contact information.

   SanMarinBusPar 4.1.19

The Marinwood Professional Office Center Sells

2400 Las Gallinas Sale

Sonoma County 1q Office Market Report

Now available 1Q19-Sonoma-Office-Market

Marin County Office Market 1q 2019


After a quiet second half of 2018, the office leasing market stormed back to normal levels in the first quarter of 2019, as 207,255 square feet of leases were signed, a 10.0% increase over the total for third and fourth quarters of 2018 combined.

Asking rates have remained steady or increased on a building-by-building basis. The apparent decline in asking rents was due to the lease-up of the highest-priced space in the market rather than any reduction in asking rents.

The strong performance of the investment sales market continued into the first quarter, as seven office buildings totaling 112,285 sold for prices ranging from $280/SF to a record 1,317/SF. Capitalization rates ranged from 4.5% to 5.5%. Several office properties in contract or on the market and expected to trade in the second quarter. These include Belvedere Place and 4040 Civic Center, expected to set pricing records in their submarkets.

mkt summ

The resurgence in leasing activity was led by Novato, accounting for 51% of the gross absorption in the county. 100 Wood Hollow Drive completed a long-term lease for almost 50,000 square feet, while the renewal and expansion of two existing tenants at Hamilton Landing accounted for an additional 43,000 square feet of leasing activity.

In North San Rafael, CorticaCare inked a 10,805-square-foot lease at 4000 Civic Center Drive,. This building’s conditional use permit for medical uses was expanded in late March to include the first floor.

in Southern Marin, WeWork committed to an additional 25, 278 square feet at 2 Belvedere Place, bringing that project to 100% occupancy.

mkt analysis

transaction table

Two of Marin County’s highest-quality office properties, Belvedere Place in Mill Valley and 4040 Civic Center Drive in North San Rafael, came to market this quarter. Expectations are for record unit pricing for major multi-tenant office buildings in each submarket. Sausalito’s The Harbors is on the market. Offerings at 495 Miller Avenue in Mill Valley and 2400 Las Gallinas in North San Rafael are in contract.

The previous record was set in April 2016, when 1415 Third Street in San Rafael, also leased to a single medical tenant, sold for $1,218/SF.

In Central San Rafael, 1111 Andersen was purchased by Ross Valley Sanitary District for $12.8 million, or $443/SF, a 4.5% cap rate on existing income. The property’s high parking ratio was very attractive to RVSD.

In another user transaction, Lifehouse, a local non-profit, purchased Nelson Staffing’s 8,180-square-foot building at 18 Professional Center Parkway in North San Rafael for $2.3 million, or $281/SF.

Sunhill Corporation purchased 45 San Clemente Drive in Corte Madera for $5.4 million, or $366/SF. The 14,750-square foot office building was 100% leased at sale, including seller’s company’s occupancy.

This quarter’s strong leasing activity took significant bites out of the previous quarter’s negative net absorption. Novato led the way in terms of net absorption, increasing occupancy by almost 50,000 square feet accounting for 65% of the 73,975 square feet of net absorption for Marin County. Over 73% of the net absorption took place in Class A properties, illustrating the flight-to-quality trend persists in Marin County.

Weighted average asking rates in Marin County dipped, most notably in the Southern Marin submarket.  Its most expensive 25,000 square feet is no longer available for lease The difference between the asking rents of South/Central Marin and North San Rafael/Novato is at its greatest in  at least10 years,. Class A rents in the south of the county now exceed Class A asking rents in the north by 70.0%. In practical terms, an average five-year lease for 5,000 square feet in Southern Marin will exceed the cost of a lease in Northern Marin by more than $600,000. Professional firms in San Francisco continue to be under enormous market pressure. Southern Marin will likely transfer some local demand up to North Marin, resulting in increased asking rents in the north part of the county.

mkt stats

NKF Announces Sale of 1111 Andersen Drive

1111 Andersen - Square

Sausalito Office Space Launches New Website

Marina Plaza, located at 2320 and 2330 Marinship Way in Sausalito, California, has launched a new website to highlight the spaces available in the complex.  The website is located at and, in addition to highlighting building attributes and available spaces, the site provides a comparison of occupancy costs with San Francisco, and provides detailed commute information to and from San Francisco.

Marin Anchored Firms Vie for Finite Inventory


The 3rd Quarter was quiet from a leasing and investment perspective for Marin County Office Space.


On the investment front, we were pleased to have the opportunity to work on the two major sales that took place in the 3rd Quarter.  Rowland Plaza in Novato was purchased by Vukota Capital Management for $37 million (($358/SF).  New ownership plans to capitalize on the location near Novato Community hospital to increase the medical leasing at the project.  They will be investing in systems and infrastructure to make the buildings even more attractive to the medical market.  Professional Financial investors (PFI) purchased 1050 Northgate Drive, another building with a strong medical occupancy, for $19.7 million ($358/SF).  PFI further continued their strong buying streak with the off-market purchase of 523 Fourth Street/930 Irwin Street for $7.8 million ($246/SF).

1050 Northgate-4189

We are privileged to have a number of sales opportunities on the market currently.  We are seeing robust pricing levels continue and seeing a lot of activity on these properties particularly from trade buyers.  We have not yet seen interest rates affect capitalization rates but expect that they will be a an increasing factor going forward.

Very high tenant improvement costs appear to have put a lid on leasing activity.  Leasing activity was at its lowest level since 2q2010.  With TI costs in many cases exceeding $75 per square foot, many tenants are extending leases in their existing spaces, unless they are looking to change size significantly, or find spaces that require minimal modifications.  At 4000 Civic Center Drive, Golden Gate regional Center expanded its presence to 8,884 square feet and Fulcrum Legal Graphics found a market ready suite that was able to accommodate its occupancy without significant improvement work.

That said, early 4th Quarter seems to have brought about an increase in touring activity.  We have also been working on some larger lease transactions that should be finalized in the 4th Quarter.

For more frequent updates resources on the market please follow our online newsletter at

Please let us know if you need anything related to North Bay Commercial Real Estate.  Our 3Q18-Sonoma-County-Office-Report is also available.


Best Wishes,

Haden Ongaro Mark Carrington
415.526.7649 415.526.7650
RE License #00916960 RE License #01219528
Newmark Knight Frank
1101 Fifth Avenue, Suite 230
San Rafael, CA 94901D 415.526.7650   F 415.526.7679
C 415.254.1067    V-Card & Resume
RE License #01219528


Asia Pacific Prime Office Rental Index


Newmark Knight Frank’s Asia Pacific Research Team has just released their report on the state of the market for 2Q2018.  Asia-Pacific-Prime-Office-Rental-Index

2q 2018 US Capital Markets Report

NKF Capital Markets presents the Second Quarter 2018 United States Capital Markets Report. The statistics and in-depth market perspective contained in the report illustrate current trends with a focus on national investment sales.

2q 2018 US Capital Markets Report