By Jon Peterson
An out of state owner has put up for sale The Harbors two-building office complex in Sausalito totaling 113,913 square feet. The potential price point would be in the low $50 million range, as stated by sources that are aware of the asset being sold.
The seller is Houston-based PM Realty Group. It has hired the JLL San Francisco capital markets team to help find a buyer for the property. The listing agent had no comment when contacted for this story.
The current owner of the property has owned the asset for three years. It had paid $34.8 million for the property in February 2016, according to public records.
The seller has completed a significant renovation to the property. It has spent more than $1.5 million on renovation plans designed by Gensler. This included upgrading the exterior, common areas and restrooms, as well as adding a communal conference center, outdoor collaborative space and bike storage.
One of the buildings in the asset is 1 Harbor Drive. This is a 46,317 square foot building that is currently 79.6 percent leased. The major tenants in the building are Westamerica Bank and Regus. The other building is the 67,596 square foot 3 Harbor Drive. This property is now 81.6 percent occupied. The tenants include Aperio Group and Prima Medical Group.
The buyer of the property will have room to bring additional income to the property. The two buildings in total have 19 percent vacancy, so some of this space could be leased up. There also is the fact that 28 percent of the leases in the property will come up for renewal in the next four years and these leases on average are nearly 20 percent below market.
The Southern Marin office market, which is where The Harbors is located, is considered to be a lower priced alternative to the San Francisco. Even though Southern Marin has seen 20 percent rental rate growth in the past three years, the market is still seen as a lower priced alternative to downtown San Francisco where rents are 73 percent higher than Southern Marin.