X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the TIC market, click here.)

PLEASANT HILL, CA-Chicago-based fund manager Transwestern Investment Co. has sold Hookston Square, a 207,000-sf multi-tenant office complex here for $39.75 million. Griffin Capital of Los Angeles acquired the well-leased class A property on behalf of 30 tenant-in-common investors, most of whom were completing a 1031 tax-deferred exchange.

The two-building three-story complex was built in the early 1980s on a 9.5-acre parcel immediately east of Interstate-680. According to a mid-year report by Cornish & Carey Commercial, the North I-680 market, where the property is located, has been the strongest performing Bay Area submarket over the past decade. The current vacancy rate for class A buildings there is less than 12%.

Hookston Square is over 95% leased to 45 tenants, with no tenant leasing more than 10% of the space. The largest tenants include Pacific Gas & Electric, an investment-grade public utility; Great-West Life & Annuity, an investment grade insurance company, and; Best Buy Stores, which keeps a regional sales office in the building.

Griffin Capital president Kevin Shields tells GlobeSt.com that about 20% of the building rolls in the next 12 months, with some of those tenants currently paying below-market rents and others paying above-market rents. The weighted average in-place rent in the building is about $2.15 per sf per month, he says, which is right at the top of the current market. Cornish & Carey will continue to provide leasing services and Transwestern Commercial Services will continue to be the property manager, he says.

“Hookston Square has a consistently high occupancy percentage with a large number of tenants, which tempers tenant rollover exposure,” says Shields. “The building is well established in a growing, healthy, supply-constrained market – all of which fits hand-in-glove with the stability of cash flow and long term value our investors seek.”

Griffin Capital raised $17 million in equity from investors represented by several different broker-dealers and obtained $30.5 million of non-recourse, 10-year fixed-rate first mortgage debt from Archon Financial, LP priced with a coupon of 5.40%. Shields says $3 million of the loan was used to establish a cash reserve account to fund ongoing tenant improvements and leasing commissions.

The majority of the investors’ equity was placed by the following broker-dealers: 1031 Exchange Options of Walnut Creek, CA; Direct Capital Securities/Private Equity Group, based in Southern California; Omni Brokerage Inc. of Ogden, UT; and, Pacific West Securities of Renton, WA. Cornish & Carey brokered the sale.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.