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8/28/14
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Miami-based Rialto Capital Management has purchased Walnut Creek Executive Park, a 423.5k sf office campus located in San Francisco’s East Bay. The asset was sold by a global institutional investor for $48.6 mil, or $115/sf.
Walnut Creek Executive Park is 75 percent occupied and features 12 buildings on 27 acres, a fully equipped fitness center and a management office. It is situated across the street from the future Safeway-anchored mixed-use development called The Orchards at Walnut Creek.
The Koll Company acted as Rialto’s advisor and joint venture partner. JP Morgan provided competitive floating-rate debt for the purchase.
Managing Directors Michel Seifer and Rob Hielscher and Vice President Aaron Herter of JLL represented the seller. Managing Director John Manning and Senior Vice President Alex Witt, also with JLL, arranged the financing on behalf of the buyer.
“Through the sale of Walnut Creek Executive Park, the sellers were able to take advantage of a very attractive capital markets environment in the Bay Area. At the same time, Rialto was able to acquire a critical mass of office product in a tightening market at a significant discount to replacement cost,” said Herter. “The high volume of long-standing credit tenants on the campus, combined with near-term upside potential via the lease-up of vacant space, led to a very competitive bidding process.”
Owned by publicly-traded home builder Lennar Corporation, Rialto bought the asset with its $1.3 bil Rialto Real Estate Fund II (RREF II). Mike Farley, Director of Rialto, commented, “We like to buy assets in secondary markets like Walnut Creek’s bourgeoning Shadelands submarket that are bolstered by strong regional economic engines like San Francisco. Walnut Creek Executive Park fits into the strategy of our second fund perfectly.”
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