Hall Equities Group is acquiring an office property at nearly half off in Walnut Creek, California.
In October 2018, a joint venture between Oaktree Capital Management and Hines purchased Ygnacio Center for $$210.5 million, according to a report from the CommercialSearch. Now, Hall is paying only $111 million for the three-building asset. That represents a 47 percent discount from the previous trade.
Hall is using a $46.5 million loan from Farmers & Merchants Bank of Central California to partially fund the purchase.
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In total, Ygnacio spans 529,612 square feet. Some features at the site include a cafe and bakery, a landscaped park and parking spots. According to Hines and Oaktree, both invested in implementing a new 8,200 amenity center that includes co-working space, conference areas, showers and bike lockers. Ygnacio is near the Walnut Creek BART station and the premier downtown area, which hosts upscale restaurants and other retail options.
Ever since the pandemic, the valuations of many office properties have been under pressure. As a result, some like Hall have been active in trying to scoop up assets at steeper discounts in hopes they recover one day to pre-pandemic levels.
Another key area in California — Silicon Valley, known for its tech hub — has seen demand with investors deploying this strategy. On property in recent months that traded includes a two-building campus in Santa Clara that Los Altos-based Four Corners Properties scooped up for about $21 million, a 75 percent discount when it was valued at more than $80 million in January 2024. Also, PSAI Realty Partners paid $54 million to acquire 365,000 square foot office tower, Pruneyard. That was 62% less than the $142 million that Oaktree and Ellis Partners spent to acquire the property six years ago.
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