The assignment started with a call from the previous owner asking for help completing a lease renewal with Heald College. We were eager to help and provide lease comparables and a referral to a local appraiser. That next year the tenant was under fire from the U.S. Department of Education and forced to shut down.
The ownership reached out to us again and wanted to know if we could sell or lease the property. Indeed we could, as we had just completed the sale of 2625 Shadelands Drive in Walnut Creek a comparable 60,000 sqft building. To get started we prepared a sale versus lease analysis using current market data and a designed a marketing plan for this type of property. Shortly thereafter we were hired and started the marketing process; that was April of 2015
The building was very unique with over 31 classrooms & labs, a large conference facility and cafeteria. It was a white elephant in terms of unique features. It was not tall enough to convert to warehouse distribution and the building was situated to the back of the lot where adding loading docks and truck circulation would have been problematic; however, it was situated on almost 8 acres, which meant that the building had expansion potential and would work very well for a company with high parking demand.
Leasing and sale downtime is not an exact science. In our opinion we felt leasing could take six to eighteen months. Three years before the same downtime was eighteen months to four years. While the market was clearly improving, pricing had little effect on rental demand; however, the sale timeline was sensitive to pricing. The higher the price the longer it could take to sell. We would first target market to the specialty users, the needle in the haystack company or government agency that would likely show interest in the property then move to market occupiers of general office and R&D space and owner users. We had a good idea who these occupiers were. Lots of uses that did not meet the zoning appeared, churches and charter schools, but we persevered to find a commercial user. Eventually the current buyer surfaced.
Eric Erickson, Philip Garrett, and Nick Ramirez represented both Buyer and Seller. The Buyer paid all cash.
