By Jon Peterson
Milpitas-based Nome Capital Partners has purchased the 315,372 square foot 1625 and 1747 North Market Boulevard office asset in Sacramento. The purchase price was $57.5 million, as stated in public records.
“The North Market acquisition is another example of our firm’s underlying investment thesis, to acquire attractively priced, high income yielding, office assets secured by GSA and healthcare tenants. This is a critical facility for our anchor tenant, and we look forward to holding this asset in our portfolio for the long term,” says Jameel Nabulsi, chief investment officer for Nome Capital.
The real estate investment firm is planning to expand its activity and be a bigger player in the Sacramento market in the near term. The company is planning three more transactions that it hopes to complete over the next six months. All o the properties that it is buying are leased to government tenants.
The property on North Market is 100 percent leased to the California Department of Consumer Affairs. This tenant has a lease with around 8 years of weighted lease term remaining. It is a state agency that oversees more than 3.9 million of licenses across over 280 license types like certificates, registrations and permits for professionals like architects, dentists and veterinarians.
The seller of the property was Buzz Oates Management. The company had hired Newmark Capital Markets to be the listing agent on the sale. Among those working on the sale were Grant Lammersen, Steve Golubchik and Edmund Najera, all vice chairman in the firm’s San Francisco office. The pricing guidance on the sale was set at $58 million when the property was put up for sale last October.
When the CDC was a tenant in the property, it had covered the cost of some improvements made to the building, investing $2.8 million over the past several years. Part of the acquisition also included some excess land for possible future development. This lot is 4.6 acres, and a second office building could be developed on the 23-acre site that encompasses the entire property.
The building at 1625 North Market is three stories, and 1747 Market is a two-story property. The asset also contains on-site parking, which includes 1,707 parking stalls.
The North Market buildings are located within the North Natomas sub-market in Sacramento. This region has a total of 2.9 million square feet of leasable assets, according to sources that track the office building market in the state capital. The vacancy rate was at 12 percent through the first quarter of 2021. This is a little higher than the 11.5 percent figure from the previous quarter.