By Jon Peterson
The venerable San Francisco developer Jay Paul has placed on the market for sale the 96,579 square foot Cooper House office building in Santa Cruz. The trade of the asset could amount to a price point in the low $30 million range, according to sources that are aware of the property being up for sale.
The five-story, 1999 vintage property is fully leased at this time with nearly 65 percent of the space in the property taken by high credit tenants. The two biggest tenants in the building are Amazon and Kaiser Permanente. Amazon has a lease for 40,107 square feet, which is roughly 42 percent of the net rentable square feet of the property. The Seattle technology giant has a weighted average lease term of 1.25 years. Kaiser takes up 21,674 square feet of the property with a lease that has a 10-year weighted lease term. The other two main tenants are Santa Cruz-based Product Ops, which is in the building for 12,595 square feet, and O’Neill Surf Shop, which accounts for 5,769 square feet.
The new owner of the property will likely have two options for the future of the asset. One avenue to pursue would be to mark expiring tenants to market to generate additional cash flow. It also could expand the footprints of Amazon and Kaiser as in-place leases expire.
The Cooper House has a strong location at 100 Cooper Street, and it is near many strong amenities in downtown Santa Cruz. One part of this is that it is a six-minute drive from the campus of the University of California at Santa Cruz, which gives employers access to a strong employee recruiting talent pool.
The property is also in the middle of a dense retail amenity base. This includes a mixture of a retailers like Peet’s Coffee, Trader Joe’s, Regal Santa Cruz theatre and a number of popular restaurants. The office building location also gives employees the option of having a 15-minute walk to the beach and the Santa Cruz Boardwalk.
The city has been one of the beneficiaries of the booming Bay Area tech scene. Located just to the southwest of Silicon Valley, Santa Cruz, which is roughly 13 square miles in size boasts a population that tops 65,000. Forbest named the city #6 of the best cities for future job growth with a projected annual job growth of 3.4 percent. The city boasts it climate and provides a family-friendly beach living alternative to some of its larger Bay Area neighbors.