JP Morgan Marketing Dublin Corporate Center, Seeking Offers Over $120MM

BART Bishop Ranch Dublin Dublin Corporate Center Dublin Place Shopping Center East Bay JLL JP Morgan Robert Hielscher Michel Seifer

Dublin Corporate Center real estate The Registry

The Dublin Corporate Center is an office jewel in the East Bay that offers amenities, proximity to the freeways and the BART line connecting this city to the rest of the region. The complex was developed in 2000 and is made of three 4-story buildings totaling approximately 440,000 square feet on a campus that sits on 18.6 acres of land. JP Morgan has owned the development since the summer of 2013, when it paid $103 million for the property, according to published reports. Now, the owner is looking to sell the property and is seeking offers in excess of $120 million, or roughly $272 per square foot. It had retained JLL’s San Francisco Capital Markets group represented by Managing Directors Robert Hielscher and Michel Seifer along with Vice President Erik Hanson to help market the property. According to The Registry’s sources this figure is significantly below replacement cost, and it reflects a net initial yield of 5.5 percent.

JP Morgan and JLL were not available for comment.

[contextly_sidebar id=”VgAYBj45kRSai828i3GLJ3JIbECWruZd”]The center is currently 89 percent leased, according to sources, although the property manager confirmed that roughly 25 percent of the complex is available for lease today, a figure that may reflect sublease availability and leases that have not closed, yet. The property manager’s Web site states that four suites are available in the complex, two for roughly 37,000 square feet, one for 35,000 square feet and the last one at nearly 5,000 square feet. Companies such as Fluor, Taleo and Epicor are its major tenants, and their names can be seen on the structures from the nearby highway.

Asking rents in the property today are at $2.60, according to the property manager’s Web site.

The complex features a set of modern amenities similar to other such developments across the region. These include a conference center, a café and an outdoor bocce court, along with additional retail, lodging and dining amenities all within a walking distance of the property.

Most of the recent real estate news in Dublin has been around housing and retail. In October of last year, The Registry reported that developers Brookfield Residential Properties and Standard Pacific Corp. announced that they had secured acquisition and development rights for a master-planned community at the 189-acre U.S. Army Reserve’s Camp Parks site in Dublin. Earlier in the year American Realty Advisors had acquired the Dublin Place Shopping Center, a 283,000 square-foot retail property for $51.1 million. These announcements were followed by earlier reports of AvalonBay announcing a 252-unit apartment community, BHV and Stockbridge Capital Group announcing a mixed-use development on 27.5 acres of land they own in the city and Regency Centers breaking ground on Persimmon Place shopping center, a 155,000 square foot retail development.

On the commercial side, the Dublin office market is doing well, however, one pending relocation could have a deep impact on the market overall. According to a recent, fourth quarter of 2015 Tri-Valley Research & Forecast Report by Colliers International, Dublin Class A weighted average asking rents are at $2.51 full service gross, and the total vacancy rate is 9.9 percent. However, SAP is planning to vacate 405,000 square feet in the first quarter of 2017 (formerly Sybase’s headquarters location) with their future relocation to Bishop Ranch in San Ramon, leasing 150,000 square feet there. The large software company acquired Sybase in 2010 and moved their training location to Dublin for the remaining term of the lease. Asking rents on this marketed space were $2.85 full service at the close of the year. Once the space is vacated, the weighted average asking rents in the Dublin Class A market will spike north of $2.75, and the vacancy will rise to 34 percent, according to the report.

The I-680 Corridor, where Dublin is located, sees its availability of large blocks of space as a major point of differentiation. “In past cycles, as San Francisco became supply-constrained and tenants realized the burden of steeply escalating rental rates, companies sought less expensive, comparable space in the East Bay,” said Tom Fehr, a Newmark Cornish & Carey executive vice president and regional manager in a statement. Fehr sees the availability of more affordable housing along with a highly-rated school system as a major draw for residents, and he believes corporate tenants will follow soon, as well.

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