By Jon Peterson
New York City-based Tishman Speyer has placed on the market for sale the 394,123 square foot California Plaza office building in Walnut Creek. The property is located at 2121 North California Boulevard.
The San Francisco office of Tishman Speyer did confirm this fact, but otherwise declined to comment for this story. The listing agent on the sale is the San Francisco office of Newmark Cornish & Carey.
“The seller of the property had completed its business plan with the property and felt now a good time for the asset to be put up for sale,” says Steven Golubchik, a vice chairman with Newmark. He is involved in the sale along with Grant Lammersen, Tim Walling, Edmund Najera and Benjamin Bucci. Golubchik declined to comment on the level of pricing the property might attract.
Tishman Speyer has been the owner of California Plaza for about two ½ years. In January of 2014 the company bought the property for $102 million. Since 2010, the property has gone through more than $6 million worth of improvements. This has included a modernization of all elevators, a full roof replacement, a new energy management system, a new fire-life-safety system, extensive plaza renovations and a state-of-the-art fitness center.
The new owner of the complex should be able to add some value to the property going forward. The current occupancy in the property is 84 percent. The largest tenant in the property, MMH Americas, will be coming up for renewal at the end of 2017. The tenant has a lease that covers 30,863 square feet. The current in-place rents in the property are now at 20 percent below market.
The overall office market in Walnut Creek has been steadily improving. Since the start of 2015, Walnut Creek office rents have increased by 11 percent, the second highest level since 2002. The rents in Walnut Creek offer a lower priced alternative to San Francisco or Oakland. The spread of rental rates between San Francisco and Walnut Creek has expanded to 62 percent, the highest since 1999. The spread of Walnut Creek to Oakland are now at an all-time high of 22 percent. “We have seen four or five technology tenants moving from Oakland and San Francisco to Walnut Creek,” said Golubchik.
California Plaza also has the benefit of being a one-block walk to the Walnut Creek BART station. At this station there are plans to develop the Walnut Creek BART Transit Village project. This is a 16-acre mixed-use development that is scheduled to break ground next year. This will have over time 596 units of apartments, 21,950 square feet of retail and 1,626 parking spaces.