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Rowland Plaza buildings in Novato sold for $20 million
The city of Novato has a new landlord.
The Barker Pacific Group, a Los Angeles-based firm that owns the Hamilton Landing business area in southern Novato, spent $20 million to purchase Rowland Plaza, which is home to Novato's leased city offices and other businesses.
Rowland Plaza includes three buildings on Rowland Way just north of the Vintage Oaks shopping center and just south of Novato Community Hospital. It totals 168,000 square feet, which calculates to about $120 per square foot with the sale. Wells Fargo financed the transaction.
"That's a fairly low price - in some ways historically low for the recent times," said Brian Eisberg of Orion Partners, which represented Barker Pacific Group in the deal. "That price might have even been high 20 years ago. The good news is that it calls out a bottom (on the commercial real estate market). Not all buildings will be worth as little on a square-foot level. Everybody shouldn't suddenly assume they should get $120 per square foot."
Rowland Plaza II, an 80,159-square-foot building next to northbound Highway 101, was built in 1997 and is home to the city of Novato administrative offices and its various departments as well as privately owned businesses.
The city began leasing the building after its properties in the Old Town section were red-tagged by the fire marshal in 2004. Rowland II also includes the 24,120-square-foot Staples store just south of the larger building. Other tenants at Rowland Plaza include Braden Partners LP, Rosenthal & Co. and the Prieston Group.
Rockwood Capital, a real estate investment company, is an equity partner in the acquisition. The property is 78 percent leased; 75 percent of the office space and 100 percent of the retail space is occupied.
The seller was an unidentified pension fund; the property owner was listed as MEPT Rowland Plaza based in Alexandria, Va., according to the Marin County assessor's office.
"I wouldn't call them desperate, but they were strongly motivated," Eisberg said.
Novato City Manager Michael Frank said the lease agreement - approximately $700,000 per year - will be unchanged under the new ownership. "We met with them and they're our new landlords," he said. "It has no impact on us."
Barker Pacific Group CEO Michael Barker said the location was as much of a motivating force as the price.
"This plays well with our position in Marin County with Hamilton," he said. "These are well-positioned buildings physically and the freeway visibility is appealing. We saw it more as an opportunity to expand our portfolio in Marin. I think it's a good place to own property. We have a lot of good tenants here."
Rowland I, built in 1995 at 88 Rowland Way, is home to county of Marin offices and totals 63,793 square feet.
Eisberg said there are leasing challenges at Rowland Plaza and interior improvements that are likely to be made. "We are going to explore a few out-of-the-box items that will be unique to the market if they occur," he said.
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