By Jon Peterson
San Francisco-based Swift Real Estate Partners has put on the market for sale the 358,589 square foot One Concord Center located at 2300 Clayton Road in Concord, as stated by sources familiar with the property.
Swift declined to comment when contacted for this story. The real estate investment firm had paid $43 million for the property in September 2010, according to published reports. There is no indication at this point what the property might be sold this time around. The investor had made some investments in the property and renovated the asset in 2014 and 2015. Swift has hired Newmark Grubb Knight Frank through its NGKF Capital Markets Group in its San Francisco office as the listing agent on the sale.
“We have already seen strong interest in the property, as we have just begun the marketing process. I think that there are many investor groups that are believers in the re-development play for office buildings in Concord. The main investor groups for the Concord property would likely be value-add investment funds and core plus capital sources,” says Steven Golubchik, a vice chairman with NGKF.
The situation with the current rents in the office building and how soon some tenants will come up for renewal will allow the new owner to create some value in the future. In-place rents are currently 34 percent below market rates with 42 percent of the building’s square footage expected to roll in the next three years. “The existing leases are where they are due to the fact some of the leases were signed one to two years ago,” said Golubchik.
There are a total of approximately 50 tenants in the property that fill up 86 percent of the space in the building. It is a wide spectrum of industries including healthcare, insurance, construction and legal services. No single tenant accounts for more than seven percent of the net rentable area of the property.
One Concord Plaza is located across the street from the Concord BART Station. This puts the property within the Concord BART submarket, where the office space vacancy is 3.9 percent. This compares to the overall Concord office market, which is experiencing 12.5 percent vacancy.
Concord is seen as a lower cost alternative to many other office markets in the San Francisco Bay Area. Asking rent discounts for Class A space are at an all-time high between Concord and San Francisco, Oakland and Walnut Creek, according to sources that track this information. The difference is 62 percent less than in San Francisco, 49 percent lower in Oakland and 38 percent less in Walnut Creek.