JLL: North 680 Corridor Experiences Strong Leasing Activity

BY THE NUMBERS

In April of 2014, all jobs lost in the recession were recovered in the two- county region. With an unemployment rate of 5.9 percent, down 130 basis points year-over-year, the local economy showed strong improvement.

The North-680 Corridor had robust leasing activity this quarter with Downtown Walnut Creek and Pleasant Hill-BART leasing space to tenants in the 5,000 to 10,000 square-foot range. Concord signed multiple full-floor leases, notably AIG at Swift Plaza. In addition, Concord tenants capitalized on early renewals and expansions this quarter ahead of rising rental rates as the market continues to tighten.

Competition is increasing among active tenants in the Tri-Valley with 1.5 million square feet of demand. Of the demand, eight active tenants are looking for 100,000 square feet and above. Despite the increased activity, the Tri-Valley is at a standstill awaiting a major anchor tenant to land, and in turn, ignite the market and propel momentum forward.

A rise in owner-occupied building purchases increased this quarter with Veeva Systems buying a building in Hacienda Business Park and Young’s Market buying 5100 Franklin – both of which are located in Pleasanton. The draw for large tenants to the Tri-Valley include a lower- cost option, access to public transportation, a strong labor pool, and more affordable housing for employees.

Leasing activity

  • IntegenX renewed 29,400 square feet at 5720 Stoneridge Drive in the Pleasanton-North submarket. The five-year, eight-month lease commenced on May 1.
  • AIG relocated from Bishop Ranch Office Park and signed a new lease on the eighth floor at Swift Plaza in Concord. The 24,500- square-foot lease will commence later this year.
  • Great American Insurance leased 7,400 square feet on the eighth floor at 1255 Treat Boulevard. The new, five-year, four-month lease will commence September 1.
  • FAB Law leased 6,800 square feet on the second floor at 1646 N California Boulevard in Downtown Walnut Creek. The six-year, five- month term will commence July 1.
  • Bank of California leased 4,335 square feet at Legacy San Ramon, 2010 Crow Canyon Place. The three-year, three-month term will commence in December.


Tenants in the market

  • GE Software Aviation is looking for up to 200,000 square feet in the Tri-Valley. They are currently located at Bishop Ranch 3.
  • Callidus is looking for 70,000 square feet in the Pleasanton-North.
  • T-Mobile is looking for 60,000 square feet and is primarily focused in the Concord submarket.
  • Astex is out in the Tri-Valley for up to 40,000 square feet.
  • Saxco International is in the market for 24,000 square feet and is primarily focused in Concord. They are currently located in Oakland.
  • Cardno Entrix is out for 16,000 square feet in Concord. They are currently located at 2300 Clayton Road.

Sales activity

  • In May, Swift Realty Partners LLC purchased the six-building California Center, 4440-4460 Rosewood Drive from RREEF Funds with Blackstone for an undisclosed price. This Class A, 1.1 million- square-foot office campus is located in the Pleasanton-North submarket and was 31 percent occupied at time of the sale.
  • In April, Westport Capital Partners LLC sold Arroyo Center, 5758 and 5794 W Las Positas Boulevard, to Belmont-based Embarcadero Capital Partners LLC for $18.8 million, or $180 price per square foot. The two-flex, Class B buildings total 104,741 square feet and were 100 percent occupied at time of the sale.
  • Veeva Systems purchased 4280 Hacienda Drive in Hacienda Business Park from Duffield Family Foundation for $24.5 million. Veeva intends to make this building their new headquarter facility in spring of 2015. They currently occupy 40,000 square-feet in Pleasanton.

FULL REPORT

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