Hines, Oaktree Nab SF-Area Office Campus
- Mar 30, 2017
Dublin, Calif.—Hines and a fund managed by Oaktree Capital Management LP have acquired Dublin Corporate Center, a three-building, 440,266-square-foot Class A office campus in Dublin, Calif.
The deal’s financials were not disclosed, and a spokesperson told Commercial Property Executive that Hines was contractually barred from identifying the seller. Information provided by Yardi Matrix, however, indicated that the immediate past owner of all three buildings was JP Morgan Asset Management.
Also according to Yardi Matrix, the three buildings had previously been sold in November 2001, March 2005, August 2007 and March 2013 for $110 million, $105 million, $121 million and $102.75 million, respectively.
The property is in the East Bay Area’s Tri-Valley submarket, east of the East Bay Hills. The submarket features high-grade office product, attractive rental rates relative to other Bay Area cities, proximity to public transit and executive housing, access to a large and well-educated labor force, and easy access to San Francisco and Silicon Valley, according to Hines.
Dublin Corporate Center was built in 2000–01 and reportedly is one of the top assets in the submarket. The campus is 83 percent leased to a tenant roster that includes Epicor Software, iTrade Networks and Callidus Cloud.
Hines stated that it will pursue strategic capital upgrades at the 18-acre campus, including exterior improvements, common area upgrades and market-ready suites, “in order to capture current market leasing momentum.”
This was Hines’ 29th joint venture with Oaktree according to Hines Senior Managing Director George Clever. Oaktree Managing Director Ambrose Fisher added that the purchase was made “at a substantial discount to replacement cost.”
The weighted average asking rent for Class A space in the Tri-Valley is $2.88 full service gross, and the submarket experienced total net absorption of 583,490 square feet on an inventory of 15.5 million square feet, according to a fourth-quarter 2016 report from Colliers International. Average vacancy was 10 percent, a year-over-year decrease of nearly 4 percentage points.