By Jon Peterson
San Francisco-based DivcoWest has sold the 210,000 square foot 700-900 Concar Drive office buildings in San Mateo for around $180 million or $857 per square foot, according to sources familiar with the sale.
A spokesperson for DivcoWest declined to comment.
The buyer of the property is Rakuten Marketing, as stated by sources who were aware of the transaction. Rakuten is also a tenant in the 800 Concar Drive property. This technology company is a firm that enables brands to increase sales through data driven marketing.
DivcoWest had owned the property for two years. The real estate investment manager had acquired the property for $130.6 million or $621 per square foot, according to public records. This transaction was completed in February of 2014. The seller of the property was J.P. Morgan Asset Management. The listing agents on the sale for J.P. Morgan was JLL led by Erik Doyle, Will Connors and Michel Seifer.
DivcoWest had owned the asset for its value-add commingled fund, DivcoWest Fund IV. For this entity, the real estate manager had raised $976 million of equity with a final close occurring in 2014. One of its largest investors was the California State Teachers Retirement System (CalSTRS), which made a $100 million commitment into the fund. DivcoWest placed $15 million of its own capital into the fund as a co-investment.
The commingled fund had plans for leverage up to a limit of 65 percent, effectively creating a fund with over a $2 billion. The targeted net IRRs for the fund were in the range of 14 percent to 18 percent. Fund IV looked to invest in value-add office and R&D assets across the country. Its target markets would be the San Francisco Bay Area, Seattle, Southern California, greater Boston, New York City, Washington, D.C., Austin, Denver and Raleigh/Durham.