Ellis Partners Recaps Hacienda Biz Park Assets

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PLEASANTON, CA-Ellis Partners recently recapitalized its 380,000-sf, 10-building portfolio within Hacienda Business Park. Principal Real Estate Investors bought out Ellis’ previous partner in the assets, Cargill Inc., in a deal that values the portfolio at approximately $60 million, according to industry sources familiar with the transaction.

Hacienda Business Park is located near the Pleasanton BART station and Interstates 580 and 680. Constructed in the mid 1980s, Ellis’ portfolio consists of four separate projects in 10 buildings within the park. The portfolio includes four single-story office/flex buildings, three two-story, multi-tenant office buildings and three single-story service and retail buildings.

While declining to confirm the deal value, PREI acquisitions director Christopher Aust tells GlobeSt.com that approximately 17% of the portfolio is vacant and another 20% rolls in the next year. “Pleasanton is one of those submarkets that has been sort of left out of the broader Bay Area recovery and a lot of people, us included, think Pleasanton’s next to take advantage of increasing rents,” Aust says. “If that happens, we’re very well positioned.”

Ellis Partners has been managing partner of the portfolio for 10 years. Company principal Jim Ellis tells GlobeSt.com he also expects the vacancy and upcoming roll will allow the partnership to increase rents along with occupancy. “If you look at rents in Emeryville, Oakland and San Francisco, they have moved a lot lately,” says Ellis, who also would not confirm the deal value. “We believe this market will enter a similar dynamic soon.”

And in addition to the leasing play there’s also a redevelopment play, Ellis adds. “All of these buildings are first generation, low density,” he says. “There’s clearly an opportunity for future up-use of the portfolio.”

Cargill, which sells crop nutrients and feed ingredients to farmers, sold its stake in the portfolio because it came to the end of its investment horizon. “They needed to redeploy the capital they had placed in this portfolio for operating purposes,” Ellis says.