By Jon Peterson
The Contra Costa County Employees’ Retirement System is planning to put on the market for sale the 83,000 square foot office building located at 1355 Willow Way in Concord, according to a pension fund board meeting document. This action was going to be discussed by the investor at a board meeting on August 12th.
The pension fund has placed a market value of the property of $10 million, according to a board meeting document. This valuation was as of the end of June of this year. CCCERA owns the property through one its separate account real estate managers, the Atlanta-based Invesco Real Estate.[contextly_sidebar id=”J3rmI1mHM2woHXxmbNuhRvp2jtlTv6vH”]The pension fund is considering bringing the property to market for sale sometime in September, and a sale could potentially be completed before the end of 2015. According to the documents, the investor is planning to hire the San Francisco office of HFF for the sale of the asset. Steven Golubchik, a senior managing director for the company, would lead the listing. Some of the sale terms were also disclosed in the document, specifically the compensation figure for HFF. According to the terms of the sale, HFF would be the exclusive representative for six months, and the broker’s commission would be 3.5 percent of the cash equivalent sales price of the property.
1355 Willow Way is doing much better than the overall market for B quality buildings in the Concord office market. This asset is now fully leased. “We are seeing that the current vacancy for B office buildings in Concord is 14.8 percent. Rents for these kinds of assets have been flat over the past 12 months,” says Eric Erickson, a senior vice president with Colliers International. He works out of the company’s Walnut Creek office.
One of features of the property that makes it a B quality asset is the building’s age. The complex was built in 1977, while most A quality buildings have been constructed ten years ago or less, according to industry sources.
There have been some recent changes to the overall Concord office market. One of these was the elimination of the 572,827 square feet from the market. This will happen once the sale of 2001 Diamond Boulevard goes through. This property is planned to be re-developed as retail space by El Segundo-based CenterCal Properties. “With that much space being eliminated from the market, it should make all of the existing properties more valuable,” said Erickson.
Another factor for this is the lack of new development. “Rents as they stand now won’t support the development of any new office projects in Concord,” said Erickson.