By Jon Peterson
Irvine-based Koll Company has placed on the market for sale its 449,223 square foot Walnut Creek Executive Park office asset. The pricing guidance on the complex is projected to be in the high $50 million range, according to sources familiar with the property.
The seller has chosen the San Francisco office of JLL to be the listing agent on the sale. Those working on the transaction includes Erik Hanson and David Dokko, both senior directors with the firm, along with Rob Hielscher, senior managing director. JLL declined to comment when contacted for this story.
The office park is located at several addresses in Walnut Creek spread over 12 buildings. These are 2775-2855 Mitchell Drive, 2730-2880 Shadelands Drive and 2125 Oak Grove Road. The property was developed in phases between 1973 and 1986 and was renovated in 2016 and 2017.
The asset is now 85 percent leased, and around 47 percent of the space in the complex is leased to investment grade or government-backed tenants. One of the tenants that occupies around 21 percent of the space Verizon. Roughly 11 percent is leased to Kaiser Permanente, 2 percent to Republic Services and 1 percent to Sherman Williams. Overall, the investment grade tenants have an average weighted lease term remaining of 4.2 years.
The office park has a planned development zoning designation, which would allow a number of flexible uses in the future. This gives the future owners the flexibility to execute on an office business plan, a medical office releasing strategy or even a multifamily redevelopment, according to the property’s offering document.
The asset has been through a significant renovation since 2014 where the current ownership has invested more than $20 million to upgrade the property. Some of the improvements have included HVAC upgrades, new signage, outdoor landscaping additions, roof upgrades, water feature installation, new entry lobbies and elevator lobbies and refreshed amenity spaces.
The office park is located in the Shadelands suburban office market. This is considered to be a lower priced alternative to downtown Walnut Creek. Asking rents in Shadelands are typically offered at a 45 discount compared to the downtown submarket, according to sources that track this information.