By Jon Peterson
New York City-based DRA Advisors is planning on selling the nearly 200,000 square foot Centre Pointe Business Park in Walnut Creek, according to sources familiar with the property. The asset is located at 165, 175, 185, 205, 215 and 225 Lennon Lane.
The listing agent on the sale is JLL, and the team involved in the sale includes Michel Seifer, Rob Hielscher, Erik Doyle, Erik Hanson, Daniel Renz, Will Connors and Cheri Pierce. JLL declined to comment when contacted for this story.[contextly_sidebar id=”5AhrezdyjDeZACQ9W62yw86HlkPofhjw”]The property will be losing one of its main tenants in the near future. The Travelers Companies now occupies 92,844 square feet of the complex, which is roughly 45 percent of the asset. This includes all of the building at 215 Lennon Lane and a portion of the buildings located at 205 and 225 Lennon Lane. The life company recently foreclosed on a property located at 401 Lennon Lane and has decided to occupy that property instead. It is expected to leave Centre Pointe at the end of 2016, which will mean that the property would then become 57.4 percent vacant. This will be the first time in over a decade that the property will have lower occupancy than all of the competitive properties in the Walnut Creek-Shadelands submarket.
The new owner of the complex will have a strong releasing opportunity, as a result. There are not a lot of large blocks of space available in the North I-680 market, where the Walnut Creek-Shadelands submarket is located. Large blocks in this region are considered to be in the 32,000 to 42,000 square foot range.
The Shadelands submarket is considered to be a lower cost alternative to other markets like downtown Walnut Creek and Oakland. Occupancy costs at Centre Pointe are typically 45 percent to 55 percent lower than in the other two markets.
DRA had acquired the complex in July of 2013 along with its operating partner, San Francisco-based Newcastle Partners. The purchase price was $21 million or $102 per square foot. There is no indication what the level of pricing on the property will be. The asset is being sold with no debt obligations.
Centre Pointe is considered to be a B quality asset. One of the reasons for this is that the property was first developed in 1982. Most A quality buildings are those that are 10 years old or less. The entire complex covers 12.4 acres of land.
The complex has had $2.5 million in capital improvements since 2011. DRA has put in motion a plan to significantly update and reposition the asset to meet the standards that modern tenants desire. Designs by KSH Architects and Gates & Associates landscape architects show early conceptualizations that include upgrading and expanding the outdoor tenant amenities like fire pits, bocce ball court, seating and overall landscaping, modernizing the building exteriors and enhancing the entries to the site.
Centre Pointe does have a transit-favorable location. The property is served by the free #7 County Connection Shadeland Shuttle, which is equipped with bicycle racks and free WiFi and runs every 15 minutes during rush hour from the Pleasant Hill BART station. There also is a fare bus that runs from the Walnut Creek BART Station to the Shadelands.