A total of 2.1 million square feet of office space changed hands in Sacramento year-to-date through June for $447.4 million, or an average of $213.70 per square foot, according to Yardi Matrix data. Transactions closed in suburban submarkets, such as the Highway 50 Corridor or Folsom, represented more than a third of the metro’s total sales volume, as investors focused on value-add opportunities.
Yardi Matrix compiled a list of the top five deals completed in the first half of 2019. Four of the top five properties sold in the first months of the year are Class B assets with strong tenant rolls, while the largest deal on our list closed in Sacramento’s Central Business District.
5. Prospect Park Commons
A Menlo Park individual investor expanded its Sacramento inventory this year with the acquisition of the 154,000-square-foot Prospect Park Commons. Callahan Property Co. sold the Rancho Cordova asset for $18.7 million in a deal subject to a $13 million loan provided by Rabobank.
The new owner selected B & Z Properties to handle property management duties and West Hawk Commercial Real Estate to be responsible for leasing the asset. The seller purchased Prospect Park Commons back in 2005 and renovated it the next year. Located at 10989 Trade Center Drive in the Highway 50 Corridor submarket, the four-building property is fully leased by the California Employment Development Department. Some 4.4 million square feet of office space is within a mile of the property—30.4 percent of the submarket’s total office stock. Downtown Sacramento is roughly 16 miles away from Prospect Park Commons.
4. 10730-10734 International Drive
After entering the metro in 2015 with the acquisition of a 42,500-square-foot building within the El Dorado Hills Business Park, Wonderful Real Estate expanded its Sacramento office footprint by purchasing two buildings totaling 178,600-square-foot in the Highway 50 Corridor submarket. RREEF Property Trust sold the two-floor properties for $37 million 13 years after acquiring them from BentleyForbes as part of a $125 million portfolio transaction.
The asset is situated at 10730-10734 International Drive in Rancho Cordova, roughly 1 mile from Mather Airport. Completed in 2001, the buildings are fully leased by Centene Corp.
3. Parkway Corporate Plaza
Anchor Health Properties paid $79 million, or $274.35 per square foot, for the four-building Parkway Corporate Plaza in the Roseville-Rocklin submarket. Broe Real Estate Group sold the roughly 288,000-square-foot campus, which is the buyer’s sole Sacramento office asset.
The property came online in 1999 and features a parking ratio of six spaces per 1,000 square feet. Tenants include Kaiser Permanente, Sutter Imaging and UC Davis Health. Parkway Corporate Plaza, located at 1620-1680 E. Roseville Parkway, is about 1 mile from Kaiser Permanente Roseville Medical Center, 2 miles from Interstate 80 and 20 miles from downtown Sacramento.
2. 1515 S Street
A partnership between Hines, JMA Ventures and Oaktree Capital Management sold the two-building, 377,600-square-foot 1515 S Street for $115 million, or $304.55 per square foot, to Boyd Watterson Asset Management. This represents a 67.9 percent increase from what the sellers paid for the property back in 2016.
Situated in downtown Sacramento, the property is adjacent to multiple public transportation, shopping and dining options. Completed in 1987, the property features some 850 parking spaces. Tenants include the California Department of Human Resources, the California Department of Corrections and Rehabilitation and Papered Iris Café. More than 18 million square feet of office space is within a 1-mile radius of the property.
1. Emerald Tower
Hines—which continues to be one of Sacramento’s top office owners—sold the 383,200-square-foot office building in downtown Sacramento to the Evergreen Co. for $127 million, or $331.39 per square foot. The seller remained the property manager for the 1984-built asset, which underwent cosmetic renovation in 2000 and 2009.
Tenants at the 18-story building include the California Department of Insurance, Perkins & Associates and Westamerica Bank. The property, which was roughly 12 percent vacant as of June, features 24,000-square-foot floorplans and a parking ratio of nearly 2 spaces per 1,000 square feet. Located at 300 Capitol Mall, the building provides convenient access to Interstate 5 as well as multiple public transportation options and dining, shopping and entertainment venues#top.