San Francisco-based Graham Street Realty has bought the 1355 Willow Way office building in Concord for $1.45 million below its $10 million appraised value.
“I think that this transaction turned out this way as the property has a great deal of deferred maintenance. We are planning on spending an additional $1.5 million above the purchased price to make improvements to the property. Most of this work will be with the exterior of the building. This will include repairing the rot on the exterior of the building and putting in a new roof. There will also be some work done to refurbish the lobby of the property,” says David Messing, a principal with Graham Street.
Graham Street is of the opinion that it will be able to add some value to the property in the future. “The rents in the property now are on average around 15 percent below market. We should be able to add some value in the future as our current tenants come up for renewal,” said Messing.
1355 Willow Way is an 84,715 square foot office building. The property was built in 1979. At the time the property was bought, the occupancy was ay 94 percent. One of the tenants in the property was the Contra Costa County Employees Retirement Association. The buyer estimates that the cap rate on its purchase was seven percent, based on the in-place rents of the property.
Graham Street likes the location of the Willow Way property and sees more opportunities in surrounding area. “We are in an area that has very strong retail amenities nearby, which includes the Willows Shopping Center and the CenterCal development, which will be starting soon,” said Messing. As The Registry reported in July of last year, El Segundo-baed CenterCal Properties purchased the 572,000 square foot redevelopment site located at 2001 Diamond Blvd. in Concord for $42 million.
Graham Street also recently bought the 43,033 square foot The Promenade in Berkeley for $13.4 million. The property is located at 1936 University Avenue. “We think that one of the interesting features of this property is that along with it [the property] includes a 120-space parking structure. There aren’t many office buildings in Berkeley that have this much parking associated with it. Our tenants find this as a very good amenity,” said Messing.
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