By Jon Peterson
New York City-based New York Life Real Estate Investors has acquired two properties in San Ramon. The firm along with San Francisco-based Cannae Partners of San Francisco bought the Norris Tech Center in the Bishop Ranch area of San Ramon. On its own, the insurance giant also bought Canyon Commons Corporate Plaza.
The sales price on Norris Tech Center was $16.1 million or $83 per square foot, according to sources familiar with the transaction. The deal was structured with 35 percent equity and a loan that amounted to 65 percent of the total cost of the transaction.
This property had been sold by an institutional group that represented itself in the transaction. New York Life worked through its listing agent on the sale, Michael Speers, a managing director for Cassidy Turley Commercial Real Estate Services in its San Francisco office.
“This property had been owned by ZKS Real Estate Partners out of Walnut Creek and AEW Capital Management out of Boston as the equity partner. These two firms had owned the property for 10 years. The asset was in a commingled fund that was at the end of its life, and the property needed to be sold for that reason,” says Speers.
New York Life is planning to invest new capital into the property. “We think that putting a few million dollars into the project that we will be able to improve the occupancy going forward. The property is now 55 percent leased to four tenants,” says Ross Berry, a senior director with New York Life, who works out of the company’s regional office in San Francisco.
Norris Tech Center was built in 1984. It has two buildings totaling 193,510 square feet. One facility is a single-story 96,575 square foot R&D flex property. The other is a two-story 96,925 square foot office building.
New York Life made this investment for its commingled investment fund, the McMorgan Northern California Value-Add/Development Fund. “We still have more capital to invest in Northern California. We are interested in all of the four main property types, but no hotels,” said Berry.
Canyon Commons was a core transaction. The purchase price was around $200 per square foot or $15.8 million, according to sources familiar with the deal. New York Life completed this deal for one of its institutional capital sources. The property was built in 1983. Occupancy at the time of the closing was 93 percent. There were a total of 18 tenants in the property.