Don’t look now, but the Marin commercial real estate market is en fuego.
In recent months Hamilton Landing, Woodside Office Center, BioMarin’s new headquarters and a 143,000 square foot building on Rowland Way in Novato have all sold off.
This is to say nothing of the sale of the 100-room Holiday Inn Express hotel in Mill Valley to Denver-based Terrapin Investments & Management Corp. for a cool $28 million. That is $280K a key for all you math majors out there, or a bump of $17.3 million over what the hotel sold for in 2012. To be fair, the owners, Ultima Hospitality and Argosy Real Estate worked the property hard. But the $17.3 million is still a pretty solid return on investment.
Hamilton Landing, the group of renovated airplane hangars in Novato, was sold to investment vehicle controlled by ScanlanKemperBard Companies out of Portland. The 405,000 square foot of office space included entitlements to build a 54,000 square foot building. Long-time owner Baker Pacific Group sold the property, along with another Rowland way building, which went for about $25 million. Comparable sales and per square foot prices would put a sales tag of around $85 million for Hamilton Landing.
Another Novato property, the Woodside Office Center on Redwood Blvd. was sold as well, bringing JLL Capital Markets $16.25 million for the 87,000 square foot space. A local investment firm, Ellis Partners of San Francisco bought Woodside. JLL, also known as Jones Lang LaSalle, bought Mill Valley-based Shelter Bay Retail Group, a company focused on managing retail properties.
The spate of commercial deals has been greeted with nothing but smiles from commercial real estate insiders and economic development type, tired of what seemed like orchards of for lease signs blooming in Marin office parks.
But the sales also come as the national commercial real estate markets have heated up to the point where the deal pace has moved ahead of 2006 levels. While banks have not lent money at the same velocity they were before the credit freeze in 2008, capital has still flowed from investment banks making loans to sell into the commercial mortgage backed securities market. Private equity players sitting on money looking for a home have piled back into the market as well. Moody’s Investors Service, one of the ratings agencies which made a fortune calling less than stellar loans and investment vehicles “AAA Rated” the last go round, has begun making loud noises in the media. “We would have hoped the lessons from the financial crisis would have been more durable,” one of their analysts told the Wall Street Journal recently.
Steve Lockett, coming off some time at UC Davis dealing with commercialization of research and technology originating on campus, is the new CEO for the Marin Economic Forum. It will be interesting to see how Lockett deals with the puzzle that is Marin’s business community, a place populated by bright people trying to navigate a challenging environment
Mount Tam Technologies Inc., the small biotech company located at the Buck Institute focused on developing treatments for Lupus, has gone public in a quiet transaction involving a merger with a cigar manufacturer.
Yep, a stogie maker.
The deal, organized as a reverse merger with the already public Tabacelera Ysidron Inc., raised no money for Mount Tam, in part because Tabacelera, a North Carolina-based cigar manufacturer, had no cash on its books the last time it filed a financial statement with the Securities and Exchange Commission in July. It posted a net loss for the quarter of $21,773. Reverse mergers are the poorer and badly regarded cousin of Initial Public Offerings. They are much faster and cheaper than IPOs, but the structure calls for a company that’s already public and not really operating, to merge with the private company wishing to go public, in this case Mount Tam. The name gets changed, any operating business from the public company is spun off, a stock symbol gets approved and the private business is public.
So Mount Tam, which is very much a real business with high hopes and a high profile partner in the Buck Institute, owes its new public life to a company that began its life in 2011 rolling tobacco.
Think Mount Tam execs sparked a cheroot to celebrate?
Mount Tam is led by CEO Tim Powers, who formerly was with Amagen and Alantos Pharmaceuticals. The company’s chairman is Chester Aldridge, who also sits on the Buck Advisory Board and is CEO of US Equity Holdings, an investor in Mount Tam.
Mount Tam also has a Celebrity Advisory Board which includes big-time pop music producers Walter Afannisief, David Foster, Randy Jackson and musicians Kenny G, Seal and Richard Marx. Please insert your own Kenny G. joke here.
Bill Meagher is a contributing editor at NorthBay biz magazine as well as an associate editor in the West Coast office of national financial new website The Deal in Petaluma. He will be on assignment next month and his column will not appear. Conspiracy nuts should send notes to the magazine using non-toxic crayons.
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