Marin County Employees to Sell Three-Property Industrial Portfolio Across Region

Port of San Francisco, Islais Creek, San Francisco, Islais Creek Adaptation Strategy, Illinois Street Bridge

sanfranciscobay3By Jon Peterson

Marin County Employees’ Retirement Association will soon be bringing to market three industrial properties in San Bruno, Richmond and South San Francisco. These properties have been valued by the pension fund for a total amount of $44.8 million.

“We think now is an appropriate time to bring these properties to the market for sale,” says Jeff Wickman, retirement administrator for the pension fund.

The asset in San Bruno is the 124,000 square foot Airport Trade Center office/warehouse complex. The property is located at Sneath Lane and Cherry Avenue. The pension fund last valued this property at $20.5 million in December of last year.

The property in Richmond is the 9,942 square foot Marina Bay Business Center. The R&D facility is located at 1000, 1050-1090 Marina South, 1101-1121 Regatta and 1430-1470 Regatta. The pension fund had pegged this property’s value at $14.8 million earlier this year.

The South San Francisco asset is the 65,300 square foot Swift Avenue warehouse. It stands at 345-367 Swift Avenue. Marin County Employees had valued this property at $9.5 million as of June of last year.

The pension fund has ownership of these three properties in a separate account relationship with Belmont-based Woodmont Real Estate Services.

The owners have hired CBRE as its listing agent on the properties. The lead person on the listing is Darla Longo, a vice chairman with the company in its Ontario office in Southern California. There will be a number of San Francisco Bay Area people involved in the sale, as well, including Bob McSweeney, a senior vice president in the Foster City office.

“The portfolio that we will be selling is likely to go out in the market in the next week or so. We view this as a core portfolio with the overall occupancy of the assets being around 97 percent,” said McSweeney.

He thinks that there will be several types of buyers interested in the portfolio. “We are expecting that the interested buyers will be a mixture of REITs, foreign capital sources and local developers who have the ability to close on a deal quickly. The preferred situation for a deal structure is all-cash with a single buyer for the three assets. It could be setup [for us] to sell the properties individually,” said McSweeney.

While a somewhat typical allocation for the sale proceeds would be to re-invest them into core open-ended commingled funds in real estate, Marin County Employees decided that they would pursue an alternate way of utilizing the funds.

“We have made the decision to place the sales proceeds into a new asset class that we have created called the real return portfolio. The kind of investments made with this asset class includes natural resources, TIPS and commodities. We feel that this will give the pension fund a better hedge against inflation. The real return portfolio has a targeted asset allocation of 7 percent of our $2 billion of total plan assets,” said Wickman.

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