By Jon Peterson
New York City-based Tishman Speyer has expanded its presence in the San Francisco Bay Area with the acquisition of the 379,000 square foot California Plaza office building in Walnut Creek.
The purchase price was $102 million or $269 per square foot, according to sources familiar with the transaction.
Brokerage firms in the East Bay think that the price paid by Tishman Speyer is an attractive one. “This price looks good when you compare the price per square foot to San Francisco where it can be as high as $750 per square foot with no upside. There is certainly more upside to the office market in Walnut Creek,” says Ed Del Beccaro, a managing director with Transwestern in its Walnut Creek office.
The property was sold by Chicago-based Heitman. The institutional real estate manager sold the property through its listing agent, the San Francisco office of HFF. This was the team of Steven Golubchik, Michael Leggett and John Simerlein. Heitman declined to comment and HFF did not respond to phone calls for seeking comment for this story.
“With office space demand so high in supply-constrained downtown San Francisco, we believe that investors in the Walnut Creek commercial real estate submarket will benefit substantially in the coming years. California Plaza is a very attractive property in a perfect location. We look forward to bringing it to our operating and tenant service standards and offering it to a marketplace on that basis,” says Carl Shannon, senior managing director and regional director for Tishman Speyer in Northern California in a prepared statement.
This investment by Tishman Speyer is the latest example of major institutional players buying office buildings in the East Bay. Other companies that closed on deals in 2013 in the region include PIMCO and Ellis Partners in Oakland, Prudential Real Estate Investors in Oakland and J.P. Morgan Investment Management in Dublin.
The Walnut Creek office market for Class A space ended 2013 on a flat basis. For the final quarter of the year, vacancy increased to 14.3 percent from 13.1 percent according to the Colliers International research and forecast report for office buildings in Walnut Creek for the fourth quarter of 2013. There is a total of 2.7 million square feet with 20 buildings in the Class A office market in Walnut Creek.