By Jon Peterson
San Francisco-based Swift Real Estate Partners has sold the 358,589 square foot One Concord Center for $70.5 million, or approximately $197 per square foot, according to sources aware of the transaction. The office building is located at 2300 Clayton Road.
Swift had owned the property in a venture with GEM Realty Capital and Flynn Properties. “OCC was one of the last investments in one of our partner’s fund, which was the motivation to sell the property in 2017,” says David Copeland, an asset manager with Swift Real Estate Partners. This real estate firm had owned the property since September of 2010 when it paid $43 million, or around $120 per square foot, for the asset, as stated by public records.
The buyer of One Concord Center is Bridge Investment Group, which has offices in both Salt Lake City and Atlanta. The company did not respond to a phone call seeking comment for this story. The cap rate on this transaction was in the low six percent range, as stated by sources familiar with the sale. This return is based on the property’s current net operating income.
The listing agent on the sale was Newmark Knight Frank. The people involved in the transaction was Steven Golubchik, Grant Lammersen and Tim Walling. The company believes that the Concord office market represents good value for tenants today. “As the most cost-effective transit-served market in the Bay Area, Concord is seeing numerous tenants migrate from Walnut Creek, Oakland and San Francisco, “ said Golubchik in a prepared statement.
The new owner of the property will be able to add some value to the property in the future. In-place rents when the property was put on the market for sale earlier this year were 34 percent below market rates with 42 percent of the building’s square footage expected to roll in the next three years. The property was first developed in 1994. When Swift bought the property, occupancy was below 50 percent. It was 86 to 87 percent occupied at the time of the sale.
One Concord Center is leased to approximately 50 tenants, which represent a wide spectrum of industries including healthcare, insurance, construction, and legal services.
Swift still owns other assets in Concord and is a big believer in this market going forward. “We think that there is a lot of positives about the Concord market. There are 1,400 multifamily units being planned for [the area]. Wells Fargo will be bringing 2,000 new employees to downtown Concord. New restaurants in downtown Concord have enhanced the local amenity base. Office tenants look at Concord as a less expensive alternative to Walnut Creek. Rents for properties near BART in Concord are $2.95 to $3.00 per square foot per month as compared to $4.00 per square foot near BART in Walnut Creek,” said Copeland.