By Jon Peterson
Houston-based Hines and New York City-based Angelo Gordon & Co. will be paying $325 per square foot or $70.7 million to acquire the 217,544 square foot San Mateo Centre office complex in San Mateo, according to sources aware of the transaction. This investment is expected to close on Friday.[contextly_sidebar id=”BzjB3lbS4AnfzYBfchqFZBdezEfeiIDm”]Hines declined to comment until the deal is completed. The buyer worked on the transaction with the assistance of its real estate broker, Cassidy Turley Commercial Real Estate Services in its Burlingame office. The two people involved with this were Mike Moran, managing principal and Clark Funkhouser, senior manager director. Moran also declined to comment on the purchase price of the complex.
The seller of the property was Chicago-based Equity Office. It has a regional office in San Mateo located at 2655 Campus Drive. This real estate company, through a company representative, did not offer comment on the transaction.
This is the second time that Equity Office had attempted to sell the property. “It was first brought up for sale last year, and a deal was never worked out. The seller then brought it back on the market earlier this year as an off-market deal and only offered it to a limited number of buyers,” says Moran.
The office complex is located at 1800, 1810 and 1820 Gateway Drive. According to the Equity Office Web site, the property has 32,214 square feet of space available. This puts the occupancy at around 85 percent.
There are two ways that the new ownership will be able to add value to the complex in the future. “One is that there are some tenants in the property that have rental rates that are as much as 30 percent below market. These rents can be brought up to market levels once their term ends. There also is the possibility of bring new tenants into the property to fill the vacant space,” said Moran. Cassidy Turley will be involved with this property in the future with the leasing efforts.
This kind of investment opportunity fits in well with Angelo Gordon & Co. The company has a history of looking for value-added and opportunistic kinds of real estate investments around the country.
This property is considered to be an A quality space. For this kind of office space in San Mateo, the current occupancy is somewhere around 90 percent, according to Moran.
San Mateo Centre has a campus style setting. The complex has a direct shuttle service to Caltrain, which would allow employees of tenants in the complex public transportation. It is also close to @Metro Center, a major shopping center anchored by a Safeway.
Image courtesy of Apple.