72,000-SF Light Industrial Complex Sells for $12M

SAN RAFAEL, CA-Buchanan Street Partners of Newport Beach and San Rafael-based Seagate Properties have joint ventured on the acquisition of 72,000-sf light industrial complex here known as San Rafael Business Center.

The partners paid $12.2 million for the five-building complex, which is fully leased to Lucasfilm subsidiary Lucas Digital through 2004. In the buildings since 1995, Lucas Digital has four options to extend for up to 24 additional months but is under construction on a new facility in San Francisco. The duo plans to reposition the asset by subdividing the 5.43-acre site into five separate parcels for sale to individual owners and investors after the tenant vacates the property.

Buchanan provided the equity for the purchase through its own investment funds and arranged debt financing for the acquisition. Buchanan committed $5.9 million in joint venture equity for the investment, providing 90% of equity required to close the investment and allowing funds for future leasing costs and tenant improvements.

Separately, Buchanan’s Realty Capital division sourced $8.9 million in acquisition financing for the purchase through a life insurance company. The non-recourse LIBOR-based floating rate loan is competitively priced at approximately 3.60% and requires only interest payments for the first three years. Jeff Eliason and Jed Gates in Buchanan’s San Francisco office arranged the debt financing.