CBRE Global Investors Grabs Suburban SF Office Tower

By Barbra Murray, Contributing Editor

California Plaza, Walnut Creek, Calif., courtesy of CBRE Global Investors

San Francisco—CBRE Global Investors caps off a busy month of acquisitions with the purchase of California Plaza, a Class A office asset in Walnut Creek, Calif. A fund advised by the global real estate investment management firm snapped up the 394,000-square-foot metropolitan San Francisco property from Tishman Speyer.

Both buyer and seller are keeping mum on the price tag on the 31-year-old California Plaza, which last traded in the fourth quarter of 2013 when Tishman bought it from Heitman Financial for $102 million.

California Plaza is considered quite a catch in the investment community, and not just for its amenities, which include an onsite restaurant, a 46-person conference room and a 1,100-square-foot fitness center that’s in the works. It’s the property’s location that is, perhaps, the main source of appeal.

Occupying two acres at 2121 N. California Blvd. in the I-680 Corridor, the 10-story office tower sits right across from the Walnut Creek Bart station, which will be the center of the 16-acre Walnut Creek BART Transit Village mixed-use project, scheduled to get underway 2017. Additionally, located approximately 17 miles from Oakland and 25 miles from San Francisco, Walnut Creek is one of the highest barrier-to-entry core submarkets in the San Francisco Bay Area, according to NGKF Capital Markets Northern California, which marketed the property on behalf of the seller. “No new buildings have been constructed here since 2003 and very few properties trade hands in this highly desirable area,” Steve Golubchik, co-head of NGKF Capital Markets Northern California, said in a prepared statement.

And with an occupancy level of 85 percent, California Plaza offers substantial upside potential through lease-up at higher rental rates. Downtown Walnut Creek boasts the second-highest monthly asking rental rate—$3.42 per square foot, full service gross—of the 12 submarkets in the I-680 Corridor, according to a third quarter report by commercial real estate services firm CBRE Group, of which CBRE Global Investors is an independently operated affiliate. “Going forward, the market is expected to tighten further as demand for the I-680 Corridor increases and tenants are priced out of nearby markets,” per the report. The new ownership plans to reposition California Plaza through a renovation program that will include the development of an indoor/outdoor conference/amenity center, as well as the incorporation of sustainable features for LEED certification qualification.

CBRE Global Investors has been quite acquisitive around the globe and across property types all year, and October was no exception—it’s been all treats, no tricks. In Europe, the firm purchased a 269,000-square-foot, Class A logistics warehouse in northern France for approximately $18.6 million, and grabbed the 463-unit Sølvgade Complex Student Accommodation in Copenhagen. Back in the U.S., CBRE Global Investors bought a 613,500-square-foot, state-of-the-art distribution center in suburban Atlanta, and in Baltimore, the firm acquired Brewers Hill, a premier 440-unit apartment complex.