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2/11/15
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DivcoWest has completed the purchase of a three-building, 210k sf office campus in San Mateo. The asset is located at 700-900 Concar Dr, north of the 92 Fwy and just west of Hwy 101. Although a price was not disclosed, industry sources are estimating that the deal topped $130 mil.
The 2003-vintage campus is 100 percent leased to five credit tenants, the largest of which are Salesforce and Japanese online retailer Rakuten. Since its completion, the campus has held a strong appeal for tenants, particularly those in the technology industry, because of its proximity to the Peninsula’s talent-base, surrounding retail and residential amenities and visibility and access to key transit infrastructure.
The property is less than half a mile from the Hayward Park Caltrain station and has direct visibility and accessibility to the San Mateo Bridge, Hwy 92 and Hwy 101. Commercial development in the immediate vicinity includes Station Park Green, a $300 mil, five-story mixed-use development with 600 apartments and 60k sf of retail, and the 1,000-home Bay Meadows redevelopment.
“This is a highly competitive asset in one of the Bay Area’s strongest and most promising submarkets,” said Sam Hamilton, DivcoWest’s Head of West Coast Acquisitions. “We believe that, like our other recent acquisitions in the market, it offers the advantage of strong, in-place current income from current tenants with the potential to attract additional major tenancies in the future due to a shrinking inventory and displacement experienced by other central Peninsula office users,” he added.
According to CBRE, the central Peninsula office market has seen 16 consecutive quarters of rent growth and the overall market continues to experience a shrinking supply of Class A multi-tenant office space due to recent acquisitions by owner-users. This is also contributing to an appreciation of newer Class A assets in the market.
This is the third investment made by DivcoWest in the central Peninsula submarket in the last six months. In October 2014, DivcoWest acquired two buildings totaling approximately 450k sf located at 1400-1500 Seaport Blvd in the Pacific Shores Center in Redwood City. Also, in December 2014 DivcoWest acquired the 115.6k sf Century Plaza in Foster City. Both of these acquisitions are within a few minutes’ drive of the company’s latest buy.
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