Developed between 1986 and 1990, Montague Park sits on 23.6 acres and is approximately 61% leased. The buildings range in size from approximately 75,000 sf to nearly 100,000 sf. Three buildings are fully leased and two buildings are vacant. Major tenants include Ultratech Inc. and Pillar Data Systems. Each building is located on an individual parcel and has a water feature at its main entrance. Surface parking for 1,519 vehicles provides a parking ratio of 3.64 cars per 1,000 sf of rented space. Loading capabilities are provided for each building via one grade-level and one dock-high door.

Amstar Group describes Montague Park as a class A office/lab space asset that is "perfectly positioned" to be the next highly desired product in the Silicon Valley "simply because class A+ product is being quickly absorbed." The company's value-add strategy is to implement an aggressive leasing effort and upgrade the appearance of the campus in order to secure deals in the improving office market.

Amstar executive director D. Scott Gibler tells GlobeSt.com that recent expansions by Google, Yahoo and others have driven class A vacancy lower and taken a big bite out of the inventory of plus 50,000-sf spaces in the market. Gibler says that bodes well for leasing up the two vacant buildings, which Amstar plans to lease to single users.

The going triple-net rent in the marketplace is $1.20 per sf per month. Jeff Houston and Mike Benevento of Commercial Property Services have the leasing assignment. Menlo Equities has been retained to manage the property.

"The acquisition of Montague Park allows Amstar to return to the Bay area market, a market we have sold out of over the last couple years," says Amstar executive director D. Scott Gibler. Amstar Group previously owned 115 Sansome in San Francisco, which was sold in 2001.

Mark Ziemendorf of Cornish & Carey's Santa Clara office represented the seller. Amstar Group represented itself.

"Today, investor interest is at record highs, there are low interest rates and we're experiencing improving market conditions all of which combines to create challenges for companies seeking to buy properties at prices that pencil," Ziemendorf says. "The fact that Amstar Group was in a position to make an all-cash offer certainly positively impacted the certainty of closing of this transaction."

Looking ahead, Amstar Group chief executive Gabe Fink says the company has about $300 million in cash available for real estate investments right away and plans to deploy some $1.5 billion over the next 24 to 36 months. "Our acquisition of Montague Park backs message up with action, and re-establishes our brand name in the San Francisco Bay Area," he says.

So far in 2005, Amstar has competed investment transactions totaling more than $500 million, including an office building in Los Angeles, an office building in Baltimore, two multifamily development sites in Los Angeles, a historic office property in Houston and a hotel in Alexandria, VA. The company currently has holdings in California, Florida, Texas, Philadelphia, Chicago, Denver, Phoenix and Washington, D.C.

Instant Insights /

Amstar Re-Enters Bay Area With $75M Acquisition

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