Five years after acquiring the office building at 630 K St. in Sacramento, Swift Real Estate Partners has sold the asset to New York Life Real Estate Investors for $28.1 million, according to Sacramento County files. The company relied on Cushman & Wakefield to market the approximately 87,000-square-foot property and provide representation in the sale transaction.
A team from Cushman & Wakefield’s Northern California Markets Group—including Adam Lasoff, Seth Siegel, Steve Hermann, Ryan Venezia, Eric Fox Ron Thomas and Kevin Partington—facilitated the sale on Swift’s behalf. Located just across from the 17,500-seat Golden 1 Center sports and entertainment arena in downtown Sacramento’s burgeoning DOCO, or Downtown Commons, area, 630 K first opened its doors in 1956 as a retail building. In 1978, the property underwent a conversion and emerged as an office destination.
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Today, the five-story structure is adorned with two wall billboard spaces and features roughly 62,300 rentable square feet of Class B office space, as well as 22,700 square feet of fully leased retail offerings on the basement and ground levels. Swift submitted the asset to a cosmetic renovation soon after the 2015 purchase. New owner NYL REI, which acquired 630 K on behalf of an institutional client, has its own plans for the asset. The firm will invest a substantial amount of capital in the repositioning of the property, where Cushman & Wakefield will oversee leasing and management activity.
Catering to a Hungry Market
The reintroduction of 630 K as a premier office asset with sizeable full floor and contiguous floor options will likely prove a timely move, as demand for space remains strong after the market’s solid performance in 2019.
The vacancy rate dropped to 8.3 percent in the fourth quarter and positive net absorption totaled 368,000 square feet, according to a report by Cushman & Wakefield. And experts predict that conditions will only get better in 2020. “Demand will remain strong and large requirements will struggle to find competitive options, particularly for tenants Downtown,” Cushman & Wakefield notes in the fourth quarter report. “Class A space in the CBD will be particularly hard to source as tenants remain willing to pay a premium to be close to the increasing amenities in the surrounding area.”