New York-based DWS has listed the Urban West Business Park in Walnut Creek for $30 million, according to a broker with knowledge of the listing.
The 130,447-square-foot, five-story office building located at 1350 Treat Boulevard is on the market for the first time in 20 years. It was last sold in 2004 for an undisclosed amount, according to public records. The total area of the site is 1.75 acres. The parking facility at the property has room for a total of 332 stalls, or 2.58 spaces per 1,000 square feet.
The building was constructed in 1986 and has an occupancy rate of 50 percent with an average lease term remaining of 2.5 years.
One of its tenants is a major player in the industrial market, Blackstone subsidiary Link Logistics. Other notable tenants include Canon Solutions and Golman Sachs.
If sold near the asking price of $229 per square foot, Urban West will follow similar trends in recent East Bay suburban transactions. California Capital & Investment Group recently acquired two office parks in the East Bay. One was The Terraces in Pleasant Hill for $286 per square foot. The other was another asset in Walnut Creek for $110 per square foot.
The difference in the Pleasant Hill and Walnut Creek transactions was one is a newer Class A building and the other is not. Coming out of the pandemic, businesses are looking for Class A space to encourage employees to return to the office. According to a report by CBRE, average rents for high-quality buildings increased by 6.7 percent this year, compared to a 1.1 percent decrease for older properties.
While Urban West might have the newer Class A advantage, it also has a prime location. According to a report by Marcus & Milichap, employees in the Bay Area moved to the suburbs during the pandemic and have plans to put down roots there even after the pandemic fades away. This has put a demand on office space in the suburbs with employees looking for shorter commutes when they go to the office. According to John Chang from Marcus & Milichap, urban office vacancy rates continue to climb after the peak of the pandemic, while suburban office vacancy is coming down.
“In a tight labor market, companies are moving to where people live,” he said.
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