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9/27/19
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A four-story, 112.5k sf Class A office property in Rancho Cordova traded hands in a recent transaction. The property is located at 2882 Prospect Park Drive, adjacent to Lincoln Hwy, about 15 miles east of downtown Sacramento.
Built in 1999, the property is visible to 148,000 cars per day. At 88% leased, the building is occupied by tenants in various industries, including finance, accounting, engineering services and media broadcasting. The buyer saw an opportunity to purchase a stabilized Class A building well-below replacement cost, with strong cash flow and NOI growth potential.
Prospect Park is situated within the Highway 50 Corridor Submarket, which has a total of 11.4 msf of office space. As the largest submarket in the Sacramento MSA, it attracts tenants seeking lower-cost alternatives, access to freeways, plenty of parking, proximity to public transportation, and diverse residential housing options. Many public companies and government tenants are also attracted to the submarket due to the large floorplates in many buildings.
Matt Post, Stuart Wright and Randy Getz rwith CBRE represented the seller, Prospect Park LLC, of Lafayette, CA. The buyer was Prospect Park Drive LLC, of San Jose. The price was not disclosed.
“The seller capitalized on an opportunity to sell an attractive, stabilized multi-tenant office building with great tenants in place,” said Post. “The buyer should benefit from the robust cash flow, which can be increased by leasing out the remaining vacancy.”
Sacramento’s office market ended Q2 of 2019 with 570.9k sf of positive net absorption year-to-date. With 13 consecutive quarters of occupancy gains, the vacancy rate now sits at 10.5%. Average asking lease rates have increased to $1.98 full service gross, with Class A asking rents rising to $2.32. Average rent is the highest it has been in a decade.
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