CBRE Receives More than $2B in Offers for Calif. Office Portfolio
- Apr 26, 2010
April 26, 2010
By Allison Landa, News Editor
Cash-strapped California has at least one reason to smile: CB Richard Ellis has received more than 300 offers to purchase and lease back 11 state office properties on behalf of the California Department of General Services.
CBRE placed the properties on the market in late February. They total nearly 7.3 million rentable square feet, nearly all of which is LEED certified, and are located in Los Angeles, Oakland, Sacramento, San Francisco and Santa Rosa.
“This sale will allow California to pay off debt, tap equity, and lock in some of the lowest rental rates seen in years,” DGS Acting Director Ron Diedrich said when the properties were placed on the market. “The short and long-term financial gains will be real to help shore up the state budget in the years to come.”
CBRE will now enter into negotiations with the portfolio buyers who have submitted the most competitive offers, with the selected buyers to be announced in late May. Once the properties are sold, the state plans to retire more than $1 billion in bond debt, a move which it says will save California nearly half a billion in interest payments over the next 20 years. An additional $660 million in proceeds will be funneled directly into the state’s General Fund.
The Department of General Services is the State of California’s business manager. It has more than 4,000 employees and a budget in excess of $1 billion.