Pad Sites See Future Repositioning

ROCKLIN, CA—Blue Oaks Marketplace, a 100,000-square-foot class-A shopping center, sits in a prominent Sacramento retail node with surrounding median annual incomes of more than $120,000. The shopping center was built in 2004 for an estimated $32 million to accommodate a large grocery business.

Soma Capital Partners recently purchased the 81% leased property for $19.2 million in partnership with Timbercreek Asset Management based in Toronto. The seller was Diamond Creek Properties, a developer based in Sacramento. Soma Capital plans to develop and reposition two hard-corner pad sites and implement a general capital improvement plan to attract a business in the food service space.

“Soma Capital has spent considerable time underwriting office and retail properties in the Sacramento market over the past 24 months,” Jordan Caspari, partner with Soma Capital Partners, tells GlobeSt.com. “While institutional investors remain wary of the market because of poor results from the financial crisis, we believe an opportunity exists to acquire top quartile properties that are well located in strong demographic and trade areas like Blue Oaks. We believe the Sacramento investment environment has improved notably with increased economic stability, a sustained lower cost of living compared to the Bay Area, excellent schools and access to the Sierra Mountains, all which have fueled continued growth in cities like Denver, Seattle and Portland.”

The purchase of Blue Oaks Marketplace is the second purchase for Soma Capital Partners this year, including its February acquisition of a non-performing loan in San Jose on a 250,000-square-foot office building. Soma Capital Partners took fee-simple ownership of the property on Automation Parkway and shortly thereafter signed a lease for 82,000 square feet with Quantenna Communications.

“We have been very disciplined over the past two years evaluating a tremendous number of opportunities on the West Coast,” Caspari adds. “It's a competitive landscape with value-add real estate funds looking to put capital out the door and we are very pleased with these two new acquisitions in the Bay Area, which both offer compelling risk-adjusted returns.”

Soma Capital Partners is working on Automation Parkway in partnership with New York-based Atlas Real Estate Partners.

“Automation Parkway is now home to Quantenna and Western Digital, and we are thrilled with the high-quality caliber of tenants occupying the space,” says David Smith, partner with Soma Capital Partners. “This will be a very active year for us as we estimate opening Quantenna in October 2017 and start renovation work at Blue Oaks, which is very well positioned in Rocklin to attract notable pad and grocer tenants.”