Marin Anchored Firms Vie for Finite Inventory

October 25, 2018 at 9:38 am · Filed under Uncategorized

3Q18-Marin-County-Office-Report

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 3^rd 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).

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 4^th 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 4^th Quarter.

For more frequent updates resources on the market please follow our online newsletter at www.workspace101.wordpress.com.

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,

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