Bay Area offices pack big punch in $1.1 billion mega real estate deal
San Jose, San Carlos and Walnut Creek offices accounted for a big chunk — nearly $200 million — of a coast-to-coast mega-deal for dozens of properties, suggesting the Bay Area still remains a magnet for real estate investors.
The five office buildings are part of a $1.13 billion property deal involving 53 office buildings on 41 separate sites.
Florida-based investors who co-founded Workspace Property Trust conducted the purchases as a way to widen their holdings in suburban office markets.
Workspace Property Trust believes that office workers and companies have begun to drift away from downtown districts and into suburban markets in a quest for a better lifestyle in what they perceive as safer neighborhoods.
The migration, some experts believe, has become pronounced in the aftermath of the coronavirus.
The outbreak of the deadly bug spawned wide-ranging business shutdowns and prompted numerous workers to operate from home rather than in-person at their offices.
“We know in the last five years millions of Americans have moved from the cities to the suburbs,” said Roger Thomas, co-founder and president of Workspace Property Trust. “Nearly one-third of all Americans today are considering moving away from cities post-pandemic.”
The property purchases give Workspace Property Trust a presence in 14 of the top 20 U.S. metro centers, the company said.
These markets include Silicon Valley, Atlanta, Philadelphia, Dallas, Charlotte, Tampa, Phoenix, South Florida, Houston, Portland, Seattle, Minneapolis, Chicago and St. Louis, according to Workspace.
Here’s what Workspace Property Trust, acting through affiliates, paid for the properties in the Bay Area. The prices were revealed through this news organization’s review of property documents filed with officials in the region:
— 1 Circle Star Way and 2 Circle Star Way in San Carlos, $111.8 million. Each of the two office buildings totals 103,900 square feet.
— 3001 Orchard Parkway in north San Jose, $40.7 million. This building totals 98,000 square feet.
— 880 Ridder Park Drive in north San Jose, $23.4 million. The building totals 83,800 square feet.
— 401 Lennon Lane in Walnut Creek, $12.1 million. The building totals 85,500 square feet.
The Bay Area office purchases total a combined $188 million, the county documents show.
Despite contributing only five of the 53 buildings in the nationwide deal, or 9.4% of the buildings, the value of the properties bought in the Bay Area accounted for 16.6% of the total $1.13 billion value of the transaction.
Griffin Realty Trust was the seller in the deal. Griffin wound up as a minority owner of the properties in the wake of the transaction.
“We are thrilled to expand our footprint and double-down on the suburban office segment,” said Thomas Rizk, co-founder and chief executive officer with Workspace.
