NORTH BAY BUSINESS JOURNAL EVENT

2008 CONSTRUCTION CONFERENCE

Building the North Bay: What's on the horizon?
Tuesday, May 20, 2008, 8-11:30 a.m., Hyatt Vineyard Creek, Santa Rosa

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Commercial Real Estate: Hines keeps Marin Commons, steps up marketing

Hines Interests has decided not to sell its 475,000-square-foot Marin Commons office property in north San Rafael and is re-directing the marketing of the property.

The Houston-based real estate company late last year started soliciting bids on the former Marin Technology Center located at 1600 and 1650 Los Gamos Drive, according to Paul Paradis, senior vice president.

A nationwide slowdown in institutional-grade commercial property investment because of the credit crisis is reported to have contributed to Marin Commons coming off the market. “It was a combination of factors,” Mr. Paradis said.

Hines hired Orion Partners Ltd. to market of the property, taking over for NAI BT Commercial as of May 5. The buildings are 48 percent occupied currently at a monthly asking rent of $2.60 a square foot full-service. Stormfront Studios shuttered months after occupying 25,000 square feet, and major tenant HealthNet is consolidating to another San Rafael location.

Hines acquired Marin Commons in 2005 and at one point contemplated housing. Instead, Hines has spent $5 million upgrading the two-decade-old facility, built as an earthquake-resistant data center for Fireman’s Fund, and preparing spaces for typical-sized Marin tenants, according to Orion’s Haden Ongaro, who is marketing the complex with Brian Eisberg and Mark Carrington.

To dispel the large-tenant impression the property has gotten, Hines has prepared two ready-to-occupy spaces of 2,200 and 3,000 square feet, with two similar suites planned and eight existing spaces ranging from 2,000 to 5,000 square feet, according to Mr. Ongaro. The complex has a gym and showers and is looking to land a 10,000-square-foot day care center.

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The 175,000-square-foot new three-building Industry West Commerce Center has nearly 39,000 square feet of new tenants set to arrive this summer and recently obtained permission to house wineries, according to Sean Heaton, part of the three-broker team from Cushman & Wakefield marketing the south Santa Rosa industrial complex.

Virginia-based Billington Wines, formerly Billington Imports, has signed a five-year lease for 24,000 square feet of casegoods and some barrel storage in a move from a smaller Windsor location. David White of Keegan & Coppin represented Billington.

In March, developer Vince Rizzo obtained a conditional-use permit for wine production in the complex. Drains would need to be cut in the slab to access sewer lines under the middle of each building. The site is served by Santa Rosa’s treatment system, for which pre-treatment of wastewater isn’t required.

Drinks distribution giant Young’s Market of Orange signed a seven-year lease for 14,770 square feet of casegood warehouse space. Dave Peterson of Keegan & Coppin represented the tenant.

Including a 4,400-square-foot temporary lease with an undisclosed winery, the complex has 78,000 square feet left to lease. Asking monthly rent ranges from 65 cents a square foot triple-net for high-cube distribution space to 85 cents for light-industrial space.

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The Home Depot wants to open stores in Novato and Dixon. However, a local spokeswoman for the Atlanta-based retailer declined to comment on whether those sites made the cut from 50 places nationwide the company just announced it is abandoning to reduce new-store spending by $1 billion over three years. The retailer plans to open 36 U.S. stores this year.

Early last month, the retailer said it was walking away from a new San Francisco store after years in progress.

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Submit items for this column to Jeff Quackenbush at 707-579-2900 ext. 206, jquackenbush@busjrnl.com or fax 707-579-8475.

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