By Meghan Hall
The East Bay city of Dublin, Calif., might sit at the edge of what many consider the San Francisco Bay Area, but the town has grown into a bustling hub in its own right. The city has hundreds of thousands of square feet of commercial and residential projects in the works as it manages its growth. For now, however, one of Dublin’s existing assets has been put up for sale. According to an offering document released by Newmark Knight Frank, 5160 Hacienda, located in the eastern part of the town near Hacienda Crossings, one of Dublin’s main commercial hubs, has hit the market. Guidance pricing for the property was not immediately available.
The seller of the property is New York City-based Gramercy Property Trust and Fort Worth, Texas-based TPG Real Estate, who acquired the property as part of a $187.5 million joint venture in 2016. The pair of firms acquired the property for $36.2 million, or just under $180 per square foot. Gramercy contributed all of the assets for the venture—which totaled 980,825 square feet over six properties—and maintained 25 percent ownership in the properties. According to previous reporting by The Registry, Gramercy made a $16 million equity investment in the venture.
The property is a one-story, transit-oriented research and development asset that is currently 100 percent leased to Carl Zeiss Meditec. The building totals 201,620 square feet of office, research and development and warehouse space. While Carl Zeiss intends to occupy the property through June 2021, and will vacate the property at the end of their lease term, the firm’s current tenancy will provide a potential investor with cashflow until a new tenant can be identified.
Built in 1997, the property also comes with 622 parking spaces, 9 loading docks and four large, roll-up doors.
According to Newmark Knight Frank, the opportunity is a unique one for investors, who can acquire an asset with near-term vacancy in a market where there is little competitive product available. No nearby properties are competing tenants of scale. Vacancy for research and development properties in the Tri-Valley, where Dublin is located, are currently at 8 percent, the lowest level ever recorded thanks to more than one million square feet of net absorption since 2013. Currently, market rents come in at $1.82 per square foot triple net. 5160 Hacienda can also achieve a rent premium, with rates up to $2.11 per square foot, in the future.
The property is also well-located, with immediate access to Dublin Crossing, Dublin’s largest multifamily development, as well as Persimmon Place and Hacienda Crossings, two nearby retail centers with shops as Barnes & Noble, Whole Foods, the Habit, and Chipotle. 5160 Hacienda is also about a twenty-minute walk from the Dublin-Pleasanton BART station.
The city of Dublin also has numerous commercial office and multifamily projects in the works, such as Boulevard. When completed, the development will include 1,995 residential units and 200,000 square feet of commercial office space. Dublin Station by Windsor, also in development, will deliver 305 units to the market, while Avalon Dublin Station will deliver 505 units. At Dublin, another mixed-use development off of Tassajara Road, would transform 77.3 acres into 400,500 square feet of commercial space and 665 residential units. The proposal was submitted by Shea Homes two years ago in 2017, and the company has been working with the City of Dublin on General and Specific Plan Amendments as well as project revisions to bring the development to fruition. A six-story Westin Hotel, totaling 163,133 square feet, is also in the works just adjacent to the existing East Dublin BART Station. The hotel will have a 5,000 square foot restaurant, two meeting rooms and 198 guest rooms.
NKF did not immediately return The Registry’s request for comment.