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ROSEVILLE, CA-Shea Properties of Aliso Viejo has broken ground on a speculative basis for the second and third buildings at its 36-acre flex-office development here in this well located suburb of Sacramento. Shea Center Roseville is adjacent to the 1.1-million-sf Galleria at Roseville and the confluence of Highway 65 and Interstate 80.

Upon completion, the 600,000-sf development will include 10 two- and three-story concrete tilt-up office buildings with circular glass lobbies at the corners. The first two buildings, completed in 2003 and 2005, are fully leased. The third and fourth buildings will be 32,650 sf and 50,070 sf; they will be complete in mid 2006. The current asking rate is $2.20 per sf per month on a full-service basis.

“We have two buildings under construction, so obviously we are optimistic about things,” Shea Center Roseville development manager Jeff Melrose tells GlobeSt.com. “We have no concrete commitments yet, but it’s been a lone bright spot in the office sector in most of greater Northern California area; vacancies have just crept up over 10% for the first time in the past three years.”

Melrose says Old Republic Title leased the first building while it was under construction and exercised an option last year to acquire the building. The University of Phoenix leased the first floor of the second building while it was under construction and Shea Homes, a sister company to Shea Properties, leased the second floor as part of an expansion into the Sacramento market. UoP occupied its space last week and Shea will occupy the building in December. In addition, Shea sold a small chunk of land to Kaiser Permanente, which developed a 16,000-sf oncology center.

For the new buildings, Melrose expects interest not only from other educational companies like UoP, but also all types legal, insurance and financial services firms and architecture, engineering and real estate companies. “There are a lot of businesses trying to get a toehold in the Sacramento region.”

As for competition, Melrose says there is currently 735,000 sf of new space coming on the market in the near term, but much of it is higher-end office space. “It’s generally more steel-and-glass stuff on the other side of I-80 that is priced at $2.50 [per sf per month] and up.”

Bill Swettenham and Kevin Sheehan of CB Richard Ellis represent Shea Properties as leasing agents for Shea Center Roseville. The Sacramento office of RMW Architecture is overseeing design plans for Shea Center Roseville. The Wentz Group of Folsom, CA is the project’s general contractor.

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