TMG Sells Emeryville Center in Latest Bay Area Disposition

By Jon Peterson

San Francisco-based TMG Partners and White Plains, N.Y., -based Rockwood Capital have sold the 270,000-square-foot Public Market Emeryville at 5959 Shellmound St. TMG had owned the mixed-use development for nearly 15 years.

The new owners are San Francisco-based City Center Realty Partners and New York City-based Angelo Gordon & Co., the equity partner. The financial details of the transaction were not disclosed. The San Francisco office of Holliday Fenoglio Fowler represented the seller. The brokers involved were managing directors Nicolas Bicardo and Steven Golubchik and Director David Karol.

“We felt that since we first developed the property in 1988 and have taken the existing space to a very high level that it was time to sell to another owner-developer who could fill out the rest of the project,” said Michael Covarrubias, TMG chairman and chief executive.

The sale is part of three million square feet of real estate that TMG has sold in the greater San Francisco Bay Area in the last 12 months. At the same time the company has acquired 1.5 million square feet. “I think this shows how popular the San Francisco Bay Area is for both buyers and sellers,” Covarrubias said. “That is good news if you are a seller as there is a great deal of capital looking to find a home in our markets—bad news if you are attempting to buy something.”

Public Market has approximately 110,000 square feet of offices and a 30,000-square-foot movie theater; the balance is retail. The project is 100 percent leased, after a Borders Group Inc. bookstore went out of business two years ago and TMG was able to re-tenant the space with Urban Outfitters Inc. and Guitar Center Inc. stores. There also are entitlements in place to add 800,000 square feet.

TMG developed the Public Market. Its equity partner until 2003 was the Teachers Insurance and Annuity Association-College Retirement Equities Fund, better known as TIAA-CREF.

The buyers expect to take advantage of the entitlement rights starting next year. “We are planning to move ahead with some new development. The first part will be to add on to the retail and food operations over the next 12 months,” said Mark Stefan, founding partner and managing member of the company. “It’s likely that later additions would be more office and multi-family.”

The Public Market is the company’s first Emeryville purchase. Stefan believes the project is consistent with other urban infill retail and mixed-use properties that the company owns. City Center owns nine properties in San Francisco and one in Burlingame, according to its Web site.

City Center Retail is the operating partner in the new ownership of the Public Market. Angelo Gordon is the main equity partner. It manages real estate opportunity funds for institutional investors around the country. TMG is remaining in the project with a small ownership position and will assist the new owners as the project expands.

Photography by Jeff Peters

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