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1/29/16
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We’ve learned of a recent Class A office investment transaction that came in a little under $400/sf. The deal was for The Atrium, a 163.8k sf building in San Mateo that was purchased by Seagate Properties and RGA Real Estate Investments LLC (RGA) for $61.6 mil ($376/sf).
Located at 1900 South Norfolk St, The Atrium is situated in a prominent position at the intersection of the 101 and 92 Hwys. The building is 90% occupied with the largest tenant being Prometheus Real Estate Group, the largest private owner of multi-family properties in the San Francisco Bay Area. Included in the purchase is a .9-acre development site with excellent visibility on South Norfolk St.
Seagate and RGA formed a joint venture to secure The Atrium from Prometheus, the building’s original developer. The Atrium’s location on a key interchange in San Mateo was a big draw for Seagate. The property sits 20 miles south of Downtown San Francisco and 15 miles north of Stanford University and also benefits from proximity to Downtown San Mateo and Caltrain.
Built in 1983, the three-story aluminum and glass clad office building is designed around an open-air atrium, which recently underwent a $300k renovation and serves as a central gathering area for tenants, complete with wifi, new hardscape, and modern furniture. Other recent capital improvements include new signage, lighting, and the installation of an EV charging station. Seagate plans to continue with upgrades to the property and tenant spaces in order to lease up the current vacancy and retain existing tenants as leases expire.
“The Atrium presents itself as prime office space with a diverse mix of tenants,” said Brian Johnson, VP of Acquisitions at Seagate Properties, “The property has been very well maintained and its proximity to major thoroughfares and Caltrain were key considerations for us. The San Mateo market continues to benefit from its central location between San Francisco and Silicon Valley” According to Cushman and Wakefield’s research, San Mateo’s office vacancy dipped below 10 percent at the close of 2015. Average asking office rents in the submarket have grown 24 percent in the last two years.
Steve Herman, Eric Fox and Bob Gilley of Cushman & Wakefield represented the seller in the transaction. Kurt Scheidt and Terry Daly with Cushman & Wakefield Mortgage Services closed on the loan. The lender was Wells Fargo. Steven Hinds and Peter Ryan of George Elkins Mortgage Bank helped facilitate the joint venture between Seagate and RGA. Mike Moran, Ben Paul, and Pat Jaeger of Cushman & Wakefield will handle leasing duties for the new ownership.
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