A Bay Area real estate investment company is in escrow to buy what’s emerged as a trophy building next to the downtown Sacramento Kings arena site.
Local brokerage sources confirm that Swift Real Estate Partners of San Francisco is likely to close a deal in coming days to buy the five-story building at 630 K St. from Sacramento owners Rubicon Partners of Sacramento and other investors. The price is believed to be about $26 million.
The 85,000-square-foot building, a onetime JCPenney location, went on the market last year. Tenants now include Shiekh Shoes on the ground floor and the Ruhstaller Brewery tasting room in the basement. The University of San Francisco vacated its upper-level classroom space there last year.
The building, at the southwest corner of Seventh and K streets, has been touted as a “gateway” to Sacramento’s new entertainment and sports complex, which is due to be completed in the fall of 2016, and drew strong interest from prospective buyers, said George Eckard, executive director at the San Francisco office of Cushman & Wakefield, which is marketing the property.
Eckard would not confirm that Swift was the buyer but said eight companies made offers for the building and three were selected for final negotiations. He said marketing efforts focused on the commercial boost that other communities – including Denver, Los Angeles, Oklahoma City and San Diego – experienced after building new sports and entertainment facilities.
Randy Getz, an executive vice president in the Sacramento office of CBRE, said the 630 K site is a “phenomenal” location with intense appeal to potential buyers, despite an absence of onsite parking.
“There are so many compelling reasons to be downtown that many (buyers) would be willing to overlook that,” he said of the parking issue. Likely tenants would be retailers and office users who “like to be downtown and value proximity to a sports arena and all the activity that it would engender.”
Getz suggested one of the site’s less obvious advantages: the potential to generate revenue by selling exterior signage on a building at such a prime location. Buildings in New York’s Times Square and in other high-profile locations can actually bring in more money from signage than they do from rents, he said.
Principals with Rubicon Partners could not be reached for comment on the pending deal Tuesday.
Officials with Swift also were unavailable for comment. The company, founded by Chris Peatross, has been on a buying spree since its inception in 2010 and has acquired a number of top properties including the 1.1-million-square-foot former Bank of America center in Concord, two downtown San Francisco office buildings and the Tower Plaza building in San Mateo. Swift officials have said they plan to build a portfolio of nearly $1 billion in West Coast properties.
Assuming the 630 K St. deal closes, it would be Swift’s first purchase in the Sacramento region.
Call The Bee’s Bob Shallit, (916) 321-1017 or go to sacbee.com/bobshallit. See his business columns on Tuesdays and Thursdays in Our Region.