(EDITOR’S NOTE: According to sources with knowledge of the transaction detail, the property sold for $168.6 million, or roughly $438 per square foot, to Phase 3 Real Estate Partners. The joint venture acquired the property in 2018 for $114.5 million, according to public documents.)
Oakland, CA (May 18, 2021) — Harvest Properties (“Harvest”) and an affiliate of Cerberus Capital Management, L.P. (“Cerberus”) have sold DC Station, a 385,000-square-foot Class A office building and adjacent seven-level parking structure in Daly City, CA.
Oakland, CA-based real estate investment firm Harvest and Cerberus, a global leader in alternative investing, acquired the asset located at 2001 Junipero Serra Boulevard in April 2018. DC Station benefited from an attractive transit-oriented location, large and flexible floorplates, recently completed on-site amenities, and overall high asset quality relative to its replacement cost and other comparable trades in the marketplace.
Approximately 70 percent leased at the time of acquisition, the partnership implemented a robust leasing program that resulted in the execution of more than a dozen leases, exceeding 105,000 square feet to bring the occupancy to more than 90 percent by early 2020.
“DC Station was an under-leased but high-quality, transit-oriented asset that we were able to acquire at a compelling basis,” said John Winther, Managing Partner at Harvest Properties. “Our acquisition thesis was not only proven through our successful office leasing but later expanded upon by getting ahead of migration trends in both the office and the life science segment of the market.”
The partnership identified strategic opportunities with the expansion and migration of life science beyond South San Francisco into neighboring markets, including Daly City. Completing the necessary feasibility analyses to confirm the building could accommodate life science users, the partnership paved the way for potential conversion of the asset for life science use to capitalize on both the leasing and capital markets demand.
“DC Station was an attractive opportunity to acquire a high-quality, well-located property,” added Tom Wagner, Head of North American Real Estate at Cerberus. “With Cerberus’ and Harvest’s combined expertise, we were able to unlock significant value through property enhancements and strategic leasing efforts. We look forward to working with Harvest on future projects.”
About Harvest Properties
Harvest Properties is a vertically integrated, full-service commercial real estate investment firm that specializes in the acquisition, entitlement, development, management of commercial property, primarily through joint-venture investments in Northern California. Over the last decade, Harvest has become an established leader in the marketplace by generating attractive returns for its financial partners, providing creative solutions and outstanding service. Harvest Properties’ portfolio comprises approximately ten million square feet of office, life science, and industrial properties in the San Francisco Bay Area. For more information, please visit www.harvestproperties.com.
Founded in 1992, Cerberus is a global leader in alternative investing with approximately $55 billion in assets across complementary credit, private equity, and real estate strategies. We invest across the capital structure where our integrated investment platforms and proprietary operating capabilities create an edge to improve performance and drive long-term value. Our tenured teams have experience working collaboratively across asset classes, sectors, and geographies to seek strong risk-adjusted returns for our investors. For more information about our people and platforms, visit us at www.cerberus.com.