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Commercial
San Francisco

Pleasant Hill office building fetches $38.5M in quality-conscious market

Companies want locations that lure employees back to work

The Terraces office building in the East Bay suburb of Pleasant Hill with California Capital's ceo Phil Tagami (LinkedIn, Jeff Peters, illustration by The Real Deal with Getty)
The Terraces office building in the East Bay suburb of Pleasant Hill with California Capital's ceo Phil Tagami (LinkedIn, Jeff Peters, illustration by The Real Deal with Getty)

Oakland based-California Capital & Investment Group paid $38.5 million for a Class A office building in the East Bay suburb of Pleasant Hill.

The company purchased The Terraces located at 2300 Contra Costa Boulevard from Eagle Canyon Capital. The Terraces is a six-story, 134,759-square-foot building with 15 balconies. It was built in 1987 and was recently updated with modern interiors.

The building is currently 87 percent leased to multiple companies across the technology, financial and professional services sectors.

Scott Prosser, executive vice president at brokerage CBRE, which represented the seller, said 680 Freeway corridor office market represents “an attractive investment for stable, value-add opportunities.”

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The East Bay office market saw a positive trend for the first time in almost three years, according to a second-quarter report by CBRE. During the quarter, tenants absorbed 164,905 square feet of office space, primarily due to several large new leases in the market.

The market is still in rebound mode, however, as landlords navigate through Bay Area employees returning to office at a slower pace compared to national trends. Vacancy rates decreased only slightly from 17.7 percent the previous quarter to 17.68 percent.

According to the report, companies are looking for high-quality space that offers amenities and an employee experience in hopes to get workers back to the office. This trend has caused only the higher-quality space to be leased, driving the overall asking rate down from $3.05 to $3.01 per square foot because of lack of demand for lower quality space.

California Capital acquired another office building just minutes away less than two weeks ago. The company purchased the 449,000-square-foot Walnut Creek Executive Park for $49 million, or $109 per square foot. The Terraces went for significantly more at $285 per square foot. It is also more than Ridge Capital Partners’ purchase of a 50,000-square-foot building for $193 per square foot in Walnut Creek.

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Bay AreaCommercial Real EstateEast BayPleasant Hill