Tishman Speyer now owns California Plaza, a 379k SF Class-A office tower in Walnut Creek, paying Heitman $102M. Above, Transwestern managing director of East Bay operations Ed Del Becarro points to the 10-story building at 2121 North California, which is 90% leased. Downtown S.F.'s tech boom will continue to raise office renewal rents and cause traditional financial, insurance, engineering, and legal tenants to migrate to the East Bay/Walnut Creek, he predicts. (Sounds like a fun party. The engineers build cool champagne pyramids. The lawyers step in when it collapses.) Cal Plaza sits next to the Walnut Creek BART station and can catch that migration leaving the city.
The $270/SF purchase price was great, still only two thirds of replacement value, he notes. In the three-block radius of Cal Plaza, four new multifamily projects will be built with over 820 units and 40k SF of retail and commercial space in the next couple years. Recent office sales in downtown S.F. are exceeding $750/SF, so he says more investors are looking for value-add office projects in prime suburban office metros such as downtown Walnut Creek, Pleasant Hill BART, Emeryville, and Oakland City Center.
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