By Jon Peterson
San Francisco-based Rubicon Point Partners has sold two office buildings in Mountain View and Palo Alto to un-named family offices.
“The buyers of these two assets are family offices that are based maybe five or 10 minutes from where the properties are located,“ says Ani Vartanian Boladian, managing partner at Rubicon.[contextly_sidebar id=”WksJhob7Jdb2XX6OmbFlak9blriNSkxL”]The properties involved in the sale were the 30,466 square foot 274-282 Castro Street in Mountain View and the 30,752 square foot 1870 Embarcadero Road in Palo Alto. The sales price on the two properties was more than $40 million, or combined price of approximately $655 per square foot. Vartanian Boladian declined to break out the sale price for each of the properties.
Rubicon had owned the property in Mountain View since June of 2013. The real estate manager had acquired the property for $15.86 million or approximately $520 per square foot, according to data being supplied by the San Jose office of Colliers International.
This property is a single-tenant asset now. When Rubicon first acquired the property, Quixey was only occupying 17,500 square feet of the property. It had an existing lease that ran to 2018, but was at a rental rate 20 percent below market. “Prior to the sale of the property, we did work out a new lease with the tenant to occupy all of the space at a higher rental rate,” said Vartanian Boladian.
Rubicon acquired the Palo Alto asset in January of 2014. The property had been 75 percent occupied by the law firm Sullivan and Cromwell, and before selling the property Rubicon leased all of the space in the property to the law firm.
Both of these properties were acquired for the Canyon Catalyst Fund. This is the emerging manager investment program sponsored by the California Public Employees Retirement System. The real estate manager overseeing this program for the pension fund is Los Angeles-based Canyon Capital Realty Advisors.
CalPERS at a board meeting last month made a new $75 million allocation to the Canyon Catalyst Fund. The pension fund previously had committed $200 million to the program. The investment mandate for the emerging manager program includes that it will be California-headquartered companies investing inside the state itself.
The new capital is expected to be allocated between the four managers in the program. The other companies in the program besides Rubicon are San Francisco-based Sack Properties, El Segundo-based Paragon Commercial Group and Los Angeles-based Pacshore Partners.
Rubicon does use other capital sources besides the Canyon Catalyst Fund. “There is an office building in San Francisco that we will be buying next week with another capital source,” said Boladian. She declined to give out other details until the deal is completed.