Goldman Sachs Joins Hines, Pearlmark JV

Goldman Sachs has joined Hines and Pearlmark Real Estate Partners in a standard-setting development project in San Mateo.
Cameron Falconer

Cameron Falconer, Hines

Goldman Sachs has joined Hines and Pearlmark Real Estate Partners as an investor in the development of a 305,000-square-foot Class A office complex in the San Francisco Bay area.

JP Morgan is providing the construction loan for the speculative buildings at 400 and 405 Concar Drive in San Mateo, Calif.

Hines, the international real estate firm, and Pearlmark, a private-equity real estate investment firm, have owned the 3.3-acre site adjacent to the Hayward Park Caltrain station and near Highways 92 and 101, since 2008. At the time the property was purchased, Pearlmark was known as Transwestern Investment Co. It changed its name in 2011 following a management buyout from parent Transwestern in late 2010.

The cost to develop the project, including acquisition, was not made public. Construction is expected to be completed in late 2016, according to Hines Senior Managing Director Cameron Falconer. Designed by Form4, Inc., 400|405 Concar is LEED pre-certified Platinum.

“400|405 Concar will set a new standard for San Mateo’s Class A space, with its combination of distinctive architecture and all the features of state-of-the-art office space in an irreplaceable location,” Falconer said in a release. “This property represents a unique opportunity to capitalize on substantial tenant demand for new office product in San Mateo County.”

The joint venture partners received approvals several years ago but waited until the market timing was positive and fundamentals were strong before beginning construction, Falconer told Commercial Property Executive.

Located in Northern California’s Central Peninsula, the property is about 25 minutes to San Francisco by car and 40 minutes by Caltrain. The site is in an area rezoned by the City of San Mateo to encourage Transit Oriented Development. 400|405 Concar is also near the $300 million Station Park Green mixed-used project that is developing 600 apartments and 60,000 square feet of retail.

CBRE states that the Central Peninsula office market has seen 16 consecutive quarters of rent growth and the supply of Class A multi-tenant office buildings in the overall market continues to shrink, increasing demand.

Another privately owned real estate investment firm, DivcoWest, has also been active in the region. Last month, it acquired 700-900 Concar Drive, a three-building Class A office campus in San Mateo, for a reported $130.6 million. Late last year, DivcoWest made two other Central Peninsula purchases – two office buildings at 1400-1500 Seaport Drive in Redwood City, Calif., and an 115,600-square-foot office building in Foster City, Calif.