By Jon Peterson
Los Angeles-based PCCP has placed on the market for sale the 155,040 square foot the Alameda Center office asset in Alameda, Calif. The pricing on the sale could come in at the low $40 million range, according to sources familiar with the sale of the asset.
The San Francisco office of JLL is the listing agent on the sale.
“Alameda Center represents an opportunity for an investor to acquire a high-quality office campus at roughly half the per square foot cost of downtown Oakland that will continue to benefit from the substantial mixed-use redevelopments throughout Alameda,” says Erik Hanson, a senior vice president with JLL. He is working on the sale as is Rob Hielscher and Michel Seifer.
PCCP has held ownership of this property since July 2015. The real estate manager had acquired the property for its commingled fund, PCCP Equity VII. This commingled fund had invested $8.7 million of equity towards a total acquisition price of $24.6 million for the property, as stated in a board meeting document from the City of Fresno Retirement Systems.
PCCP had completed a $601 million equity capital raise for the commingled fund in August 2106. This capital raise included a $10 million investment from PCCP. The commingled fund had an investment strategy of buying transitional assets in the top 25 markets around the country and add value to the asset and sell the property to core investors. The asset in Alameda was 89 percent occupied when PCCP bought it. There are now no vacancies in the property.
There is a total of four buildings in the Alameda Center asset. These buildings are located at 2430, 2450, 2470 and 2490 Mariner Square Loop. The building located at 2490 Mariner Square Loop was built in 1990, and the other four were developed in 1998. Each of the buildings has its own separate legal parcel. This will allow the new ownership to sell off individual buildings or smaller assemblages to users or investors that creates multiple potential exit strategies.
Alameda Center does serve as a headquarters for its main tenant. This is Sila Nanotechnologies, a firm specializing in the development and manufacturing of battery products for the electric vehicle and consumer product industries. This tenant occupies over 87,000 square feet with a lease that runs through 2026.
Overall, the tenants in the property have an average lease term of 6.8 years with a staggered rollover schedule. In-place rents in the property are 28 percent below current market rents for Alameda. The office complex is located within the Alameda North sub-market. This is a total of 1.2 million square feet in the sub-market with a current vacancy of 6.2 percent. The average asking rent is $38.28 per square foot or about 40 percent less than the Oakland market.