By Jon Peterson
A partnership based in the San Francisco Bay Area is looking to test the market by placing for sale a property that Amador County Health and Human Services occupies in Sutter Creek, Calif. The asking price on the asset is $22.2 million, or roughly $452 per square foot, according to the property’s offering document.
The current property owner has chosen the Sacramento office of CBRE to be the listing agent on the sale of the property, which is located at 10877 Conductor Boulevard in Sutter Creek, Calif. A person working on the transaction for the company is Randy Getz, an executive vice president of the company.
“I would think that the property would attract investors that are familiar working with properties leased to public entities. These firms also will be willing to accept the fact that there might be some risk in case the tenant chooses not to renew its lease for the property,” said Getz.
If the property’s new owner closes the transaction at the asking price, the cap rate on the sale would be eight percent. This return would be based on the property’s projected net operating income of $1.8 million as of July 2022, which includes a five percent CPI rent increase. This figure is somewhat conservative, too, since there are no caps on the annual rent bumps.
The property is fully leased to the Amador County Health and Human Services. County agencies that occupy this facility include Health and Human Services, Recreation, Child Protective Services, In-Home Support Services, County Conservator, Public Health, Social Services and Mental Health. The asset was developed as a build-to-suit building when it was constructed in 2007. Amador County demanded that the property has a costly steel-frame construction, which is atypical for a single-story CTU building of this type.
The tenant has a current lease that does not expire until December 2027. It also has three options that could extend a lease for another 14 years. The office building totals 49,126 square feet, and there are 201 parking spaces available for employees in the building. The total size of the parcel is 5.66 acres.
The property on Conductor Boulevard is the largest office building in Amador County. The current vacancy in the region for office properties is 2.2 percent. There is only a total of 5,000 square feet of vacant space for office properties in the county.