By Meghan Hall
A nearly-72,000 square foot commercial property at the heart of Emeryville, and steps from Lennar Multifamily Community’s 7.9-acre mixed-use development, has come up for sale according to an offering document circulated by brokerage firm Newmark Knight Frank. Located at 1450 Sherwin, the fully vacant office development offers potential investors with either the opportunity to reposition or develop the site entirely.
The property is located at 1450 Sherwin Street and comes equipped with 117 parking spaces and 23,960 square foot floorplates.
Guidance pricing for property is about $20 million, according to Newmark Knight Frank. According to public documents dating to September of 2019, Lennar was in negotiations with a potential purchaser for the acquisition of 1450 Sherwin, home to “Building 1-31”, but the agreement was terminated.
Newmark Knight Frank posits that the property presents “an exceedingly rare development opportunity” in large part due to its location in Emeryville and its proximity to surrounding new development. On an adjacent 7.9-acre parcel, formerly owned by the City of Emeryville and Sherwin Williams, Lennar is construction 500 multifamily units, a 2.5-acre park and 4,000 square feet of retail. Just up the street, on a property known as the Rifkin Lot, 230,000 square feet of future development is planned.
Other, already established development nearby includes Powell Street Plaza, an outdoor retail center anchored by Trader Joe’s, BevMo and Marshalls, as well as Bay Street Emeryville. The latter is currently home to 65 stores, 10 restaurants a movie theater, a 230-key hotel and 400 residential units. Nearby employers, such as BioMed Realty, Symicbio and Stanford Health Care, all have offices nearby.
In addition, Newmark Knight Frank states in the offering document, the property is well poised for redevelopment or procuring a large-scale office tenant due to Emeryville’s strong life science employment fundamentals. The brokerage firm notes that Emeryville currently has a 1 percent vacancy rate and a $5 triple net asking rate. Mission Bay and South San Francisco have vacancy rates of zero percent and 2 percent, respectively. Taking a wider view across Alameda County, life science employment continues to grow at around 7 percent, with total life sciences employment in the county reaching 19,346 at the end of 2018.
Demand, as a result, remains high. As of the third quarter of 2019, there were more than 10.5 million square feet of tenant requirements in San Francisco and Oakland alone, while vacancy sits at over 5.5 million square feet. Nearly half of these requirements come from technology tenants, but health care and life sciences, business services and legal, as well as research and development also account for sizeable pieces of the pie.
Additionally, office space in Emeryville continues to be in demand as companies face increasing rates in Oakland, where rate growth has increased by 102 percent since 2014. As a result, Emeryville provides a 17 percent reduction in occupancy costs when compared with Oakland, and a 44 percent reduction when compared with San Francisco.