By Meghan Hall
Hites Plaza, a Class A office building, has hit the market at a time when suburban offerings are garnering increased investor interest. The 120,199 square foot building, as well as an adjacent 5.75-acre site, are located in the growing suburban market of Dublin. The seller and current owner, according to public records is HHH Investment Co., a private trust affiliated with George and Andras Hites of Copperopolis, Calif.
A source familiar with the market believes that suburban assets such as Hites Plaza will attract investor attention, and that the suburbs will experience growth as a result of COVID-19.
Hites Plaza is located at 5601 Arnold St. Both the office building and an adjacent parcel can either be purchased together by a single investor or separately. Guidance pricing for either portion of the property was not immediately available. According to an offering memorandum released by Colliers International, the property is currently 90 percent leased. 87 percent of space is occupied by national or investment-grade tenants. The Bureau of Alcohol, Tobacco Firearms and Explosives, an AA+ credit tenant, as well as the Department of Justice, an AA- credit tenant, anchor the building. Easterseals, the largest nonprofit health organization in the U.S., also leases space in Hites Plaza.
The additional adjacent acreage also provides an investor with potential upside. Market professionals indicate that the City of Dublin is open to a number of potential uses.
Within the submarket, Class A office asking rents have increased to $3.31 per square foot, a two percent increase since the beginning of the year. Vacancy decreased by 140 basis points, while gross absorption during the second quarter totaled 177,000 square feet.
The Dublin/Pleasanton submarkets have attracted a number of Fortune 500 companies in recent years, with 2.2 million square feet worth of tenant migration since 2015. Within the immediate vicinity of Hites Plaza, is the headquarters of Ross Dress for Less. Amazon Web Services, Oracle, Kaiser Permanente are also located nearby. Workday and Safeway are also headquartered in the area.
The Dublin-Pleasanton BART Station, as well as Interstates 580 and 680, are also less than a mile from the property, making it easily accessible. The Registry’s source believes these fundamentals will make it appealing to a number of potential investors.