By Jacob Bourne
Gateway Corporate Center I & II at 160 and 180 Promenade Circle in Sacramento has been put on the for-sale market by KBS REIT II, a real estate investment trust, which purchased the commercial property in 2011 for $47 million. Developer Opus West Corporation broke ground on the property in 2005 and completed the 235,193 square foot center in 2009. Agents from Newmark Cornish and Carey are advisors for the potential sale. Representatives from Cushman & Wakefield have provided leasing information and property management for the current owner.
The Center is made up of two three-story Class A office buildings each providing 116,918 square feet of leased space. It’s located within the greater mixed-use development called the Promenade at Sacramento Gateway featuring 655,000 square feet of retail and a hotel. The Natomas Marketplace with 500,000 square feet of dining, retail and healthcare options is also nearby.
The buildings’ steel frame structure is marked by brick exterior with floor to ceiling glass windows. Both buildings have sustainability features with 160 Promenade certified LEED Silver and 180 Promenade Energy Star rated. Building amenities include bike storage, locker rooms with showers and an onsite management office. A notable aspect of the property is its proximity to housing, child care, schools, banks, shopping and freeway access, as well as being less than nine miles from the Sacramento International Airport.[contextly_sidebar id=”tX9ZUsfvzpmP6ecK6DWkuFIbRVJjODD6″]“We’re working with KBS and are about midway through the process of marketing for a sale,” said Ron Thomas, leasing agent, Cushman & Wakefield. “We’re out in the market right now and will probably select a buyer in the next couple of weeks. There’s definitely a lot of interest as it’s a strong property.”
Thomas couldn’t comment on an asking sale price but stated that rentable floor plates are going for about $2.50 per square foot per month currently. He said the property has been at or above 92 percent leased for the last several years in part to due to high demand and the favorable, very visible location. According to Newmark Cornish and Carey literature, the property is currently 95 percent leased by a variety of tenants.
“It’s one of the nicest properties in North or South Natomas for Class A office,” Thomas said. “It has strong private sector and national tenants. It’s very well situated near I-80 and I-5 with close access to the airport.”
Cushman & Wakefield’s 2016 Q3 Office Sacramento Region Marketbeat report indicates that office vacancy will continue to drop with a projected rise in office rents. Within the Natomas-Northgate submarket, there was 6.5 million square feet of office inventory for that quarter with a 14.8 percent overall vacancy rate. Asking rents for Class A office product in that area averaged $1.94.
The only office space under construction for the Sacramento region in Q3 was located in the Davis-Woodland area and Thomas doesn’t foresee any new product coming to Natomas in the near future.
“Office rents have increased and vacancy has decreased. New companies are coming to the area. With the overall increase in rents, I anticipate we’re going to see current trends continue,” he said.
Neither representatives from Newmark Cornish and Carey nor KBS were permitted to comment on the anticipated transaction.