By Jon Peterson
A joint venture between Chicago-based LaSalle Investment Management and Emeryville-based Harvest Properties has placed the 126,345 square foot office/flex building in Foster City located at 1149 Chess Drive on the market for sale. The potential price point on this asset could come in slightly above $65 million, according to sources that track the sale of office buildings in that market.
LaSalle Investment Management declined to comment when contacted for this story. The listing agent on the sale is the JLL Capital Markets team for the San Francisco Bay Area.
LaSalle had acquired the property for $36.1 million in February of 2017, according to public records. This acquisition was made for a client as a separate account investment. The real estate investment firm has been able to complete its business plan on the asset, which included finding a new tenant for the building and that is why the property is being sold at this time.
Situated on 5.69 acres, 1149 Chess Drive features 67,000 square feet of office space, 18,000 square feet of lab space, and 41,000 square feet of R&D/warehouse/amenity space. The Property has four auto-leveling docks, a warehouse clear height of 26 feet, two generators and power totaling 4,200 AMPs.
The tenant in the property is Zoox, Inc. This is a company is a start-up firm involved in the autonomous vehicle business. The tenant moved to the Foster City property from its previous location in Menlo Park in 2017. Zoox invested over $20 million of its own capital into the property. The improvements made to the asset included creative office space, highly-improved warehouse and specialized lab rooms.
The asset in Foster City was first developed in 1975, and then it was renovated in 2018. The lease with Zoox has another 9.2 years left to run. The current rental rate in the property is now roughly 40 percent below market, according to sources. The property is within walking distance of the Bridgepoint Shopping Center, which gives Zoox employees access to a variety of casual restaurants, coffee shops and other retail amenities.