Monday Properties has acquired 1840 Gateway Drive, a value-added Class A office building in San Mateo, Calif. The acquisition, the company’s first in the San Francisco Bay Area, is part of a broader effort to build out its West Coast platform. The company acquired the property in an off-market deal.
The property is 20% occupied, which fits into Monday Properties’ value-added investment profile. “It’s a true Class A asset that’s situated between two major job centers – San Francisco and Palo Alto,” said Brendon Lydon, senior v.p. of acquisitions. “It’s also one of the newest in the submarket and has great clear heights and natural lighting.
Plans for the property, which was previously leased to a single tenant that vacated its space, include the addition of electric car charging stations, landscaping enhancements, new signage, and constructing spec suites. “We’re hoping to offer tenants premium creative space at competitive rates,” Lydon said, noting that Monday Properties will target smaller tenants that are looking for better value than they’d get in San Francisco or Palo Alto. “The space will be modern, creative, and highly efficient.”
Monday Properties has other acquisitions on the horizon in the San Francisco Bay Area, Los Angeles and other parts of Southern California, and the Seattle-Puget Sound area. “Our broader mandate is to capture properties where there is strong job growth that will allow us to create value,” said Phil Cyburt, managing partner. “We’ve got an integrated platform that allows us to find strong repositioning opportunities and we’re looking for well-located, quality product that we can add value to.”
Seven years into a recovery means that it can be hard to source deals that fit its investment profile but Cyburt noted that Monday Properties’ move to add local expertise will help it to source deals. “You’ve got to be a local player to find opportunities and that’s part of the Monday story,” he said.
Westbrook Partners was the seller, according to Real Capital Analytics. The company paid $316, or about $22.3m for the property in 2014. At that time, the asset was 34% occupied.