By Meghan Hall
A Class A office building in suburban Dublin has traded hands after hitting the market in the fall of 2020. In a transaction that recently closed, Hites Plaza has traded for $34.7 million, or $289 per square foot, according to industry sources familiar with the deal. The seller of the property is HHH Investment Co., a private trust affiliated with George and Andras Hites of Copperopolis, Calif. The buyer of the property was San Francisco-based Toda America Inc.
The 120,199 square foot building, as well as an adjacent 5.75-acre site, was placed up for sale in September of 2020. Located at 5601 Arnold St., the building and development site could be acquired either together or separately. According to market experts, the adjacent project site could be utilized for a range of uses once sold.
Colliers International’s Executive Vice Presidents Andy Zighelboim, Brian Lagomarsino and Bob Gilley, along with Senior Vice Presidents Kevin Moul, Brad Idleman and Andrew Gibson represented HHH Investment Co. in the sale of the property.
“The relevancy of the office has been brought into question this year as many of the Bay Area’s companies have adopted long-term work from home policies in response to COVID,” said Moul in a statement. “Toda America’s acquisition of Hites Plaza not only instills confidence in this asset but also highlights equity demand for quality suburban office space.
At the time Hites Plaza was placed on the market, the property was currently 90 percent leased. 87 percent of space is occupied by national or investment-grade tenants. The Bureau of Alcohol, Tobacco Firearms and Explosives, an AA+ credit tenant, as well as the Department of Justice, an AA- credit tenant, anchor the building. Easterseals, the largest nonprofit health organization in the U.S., also leases space in Hites Plaza.
Heading into the end of 2020, Class A office asking rents sat at about $3.12 per square foot in the Pleasanton and Tri-Valley markets, according to a report released by Colliers International. Many markets, including Dublin, have been quiet in recent months. Vacancy increased to 14.3 percent at the end of the third quarter, with a negative net absorption of more than 231,000 square feet.
However, the Dublin/Pleasanton submarkets have attracted a number of Fortune 500 companies in recent years, with 2.2 million square feet worth of tenant migration since 2015. Within the immediate vicinity of Hites Plaza, is the headquarters of Ross Dress for Less. Amazon Web Services, Oracle, Kaiser Permanente are also located nearby. Workday and Safeway are also headquartered in the area.
“The significance of this deal is underscored by recent relocation announcement from major Bay Area companies, some of which are opting to move to suburban areas” added Moul. “The Tri-Valley is well-positioned to meet the growing suburban office trend. The area is already home to a growing and diverse corporate sub-market of technology and Fortune 500 companies and offers employees a myriad of benefits from affordability, favorable commute times to surrounding Bay Area locales and abundant housing.”
Toda America employs more than 4,000 people worldwide in construction design and supervision, engineering and development. To date, the firm has focused most of its activities and real estate holdings in Northern California and the San Francisco Bay Area. According to its website, its portfolio includes an array of asset types, from office buildings to condominiums to restaurants and storage facilities.
As of this writing, Colliers International had not yet returned The Registry’s request for comment.