By Jon Peterson
Sacramento-based Buzz Oates Management is looking to sell one of its office assets in its home town. The company has put up for sale the 315,372 square foot office property located at 1625 and 1747 North Market Boulevard in Sacramento. The pricing guidance on the asset is around $58 million, or just around $184 per square foot, according to sources that follow the major office buildings for sale in Sacramento.
The seller has hired the Newmark Capital Markets team to be the listing agent on the sale. Among those working on the sale will be Grant Lammersen, Steve Golubchik and Edmund Najera, all vice chairmen in the firm’s San Francisco office. Newmark declined to comment when contacted for this story.
The two office buildings are nearly fully leased to the California Department of Consumer Affairs. This state agency administers more than 3.9 million licenses across over 280 license types including certificates, registrations and permits for professionals like architects, dentists and veterinarians. This tenant has a lease that has an 8.6 years of weighted average lease term remaining.
The tenant has made a long-term commitment to the property with an investment of $2.8 million for improvements to its space over the past seven years. The new owners will have an opportunity to realize some value-add in the property in the future. The property is sold with 4.6 acres of excess land that can be development into an additional office building, thereby expanding the asset. The entire property sits on nearly 23 acres.
The building at 1625 is three stories, while the 1747 building is a two-story property. Combined, the two buildings also have a total 1,707 parking stalls. The property’s location is near two shopping centers totaling 650,000 square feet of retail space. These centers are Promenade at Sacramento Gateway and The Village at Sacramento Gateway. Employees working the office asset have a six-mile drive to downtown Sacramento.
The overall Class A office market in Sacramento remains tight with a current vacancy of 3.4 percent. The office asset up for sale is located within the North Natomas sub-market of Sacramento. Full-service rents in this region are $1.67 per square foot per month. This compares to $2.70 per square foot per month for downtown Sacramento, or a 38.2 percent discount.