PSAI Realty Partners has paid top dollar for an office complex in Downtown Walnut Creek, with the price tag of $477 per square foot – about double what office buildings fetch in San Francisco.
The buyer should know the relative difference, as PSAI is led by Peter Sullivan, based in San Francisco. The firm paid $167 million for the 362,400-square-foot Plaza at Walnut Creek at 1331 and 1333 North California Boulevard, the San Jose Mercury News reported.
The seller was New York City-based Clarion Partners. A platoon of Newmark brokers arranged the deal.
“This property presented investors with a once-in-a-generation opportunity to acquire a top-performing asset in the region,” Steven Golubchik, one of Newmark’s brokers, told the Mercury News.
“This is a top-dollar price for a trophy office property, maybe the best in the East Bay,” added Jeffrey Weil of Colliers, who wasn’t involved in the deal.
A pandemic shift to remote work has crimped the office market in the Bay Area and beyond, with high office vacancy and buildings in San Francisco, Downtown Oakland and the South Bay selling for a fraction of their prior values.
Weil pegged the price point for once-premium offices In San Francisco at around $250 per square foot.
The Plaza at Walnut Creek is an East Bay trophy property and boasts a 93 percent occupancy rate. The complex is done in curving silver and glass that offers views of Mount Diablo. The complex is a short stroll to shops and restaurants, and the Walnut Creek BART station.
Highlights include an executive conference room, full-service deli, Scott’s Seafood Grill & Bar, 24-hour security and men’s and women’s locker and shower rooms, according to Loopnet.
Buyers lined up with offers to purchase the office complex, Newmark brokers said.
“The marketing processes generated some of the strongest investor interest we have seen in the last three years,” Golubchik told the Mercury News.
PSAI Realty Partners, founded in 2006, has invested heavily throughout the Bay Area, but lacks an official website. In 2020, it was renamed PSAI Realty Partners IV, according to state business records, now managed by Sullivan, Michael Feldman and Erik Foraker.
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In January, PSAI Realty bought a 357,400-square-foot office complex in Pleasanton for $73.5 million, or $206 per square foot.
In January of last year, the firm bought a 123,600-square-foot office and research campus in Sunnyvale for $31 million, or $251 per square foot, according to The Real Deal.
— Dana Bartholomew