By Jon Peterson
A joint venture that includes Hines, Oaktree and JMA Ventures has chosen to place on the market for sale the 399,636 square foot asset in Sacramento located at 1515 S Street. The pricing on this sale will be in excess of $100 million, as stated by sources that track the sale of office buildings in Sacramento.
The San Francisco office of Hines did not respond to an email seeking comment for this story. The listing agent on the sale is Cushman & Wakefield. Among the people involved in the sale are Adam Lasoff and Seth Siegel. Cushman & Wakefield declined to comment when contacted for this story.
The sellers of the property have held ownership of the asset since May 2016. The three firms had acquired the property for $68.5 million, or around $171 per square foot, according to public records.
The property is now 98 percent leased to two major tenants. The bigger of the two tenants is the California Department of Corrections and Rehabilitations. This government entity takes up 72 percent of the property’s net rentable area. The California Department of Human Resources occupies another 26 percent of the property. Both of these tenants recently renewed their leases that will last through February 2029.
The current ownership of the property has committed to provide significant base improvements to the two buildings in the asset. These include lobby and elevator cab interior finishes, upgrades to all restrooms, showers, and a fully renovated courtyard.
There is a second revenue generator for 1515 S Street besides the rent in the two buildings. The asset also has an eight-story parking garage that has room for 759 stalls. This operation generated nearly $1.8 million of revenue over the past 12 months, which is projected to increase by over 5 percent in 2019.
The office asset is located in the heart of the R Street Corridor. Directly across the street from 1515 S Street is the 260,000 square foot Ice Blocks mixed-use development. This asset was first developed in 1987, and the final phase of the development was completed in 2018. This project covers three city blocks with a combination of new retail, residential and office space.
