CWCapital Asset Management has placed on the sales block Britannia Business Center III, a 191,000-square-foot office and research and development property in Pleasanton, Calif., that it took in 2012 by foreclosing against a $32.8 million CMBS loan. The special servicer has hired Mission Capital Advisors of New York to market the property for sale.
Thursday, February 19, 2015
CWCapital Offers Calif. Office that Backed $32.8Mln CMBS Loan
CWCapital Asset Management has placed on the sales block Britannia Busi- ness Center III, a 191,000-square-foot office and research and development property in Pleasanton, Calif., that it
took in 2012 by foreclosing against a
$32.8 million CMBS loan.
The special servicer has hired Mission
Capital Advisors of New York to market
the property for sale. Last week, it
started distributing offering information
to prospective investors, who will have to
submit indicative bids on March 4. Mis-
sion Capital then will select a number of
finalists to compete in a best-and-final
round of bidding on March 25. The plan
is to complete a sale by April 6.
The loan against Britannia III was
securitized through Wachovia Bank
Commercial Mortgage Trust, 2005-C22,
and was transferred to CWCapital in
2010 when its main tenant, Robert Half
International, moved out of its collateral
property, leaving it 57 percent occupied.
That resulted in a sharp decline in cash
flow, which led to the mortgage’s default in March 2011.
CWCapital since then has managed to attract tenants to the property, at 3870
Stoneridge Drive, 4511 Willow Road and 5785 West Las Positas Blvd. As of the end of last year, it was 79 per- cent leased, according to servicer data
compiled by Trepp LLC. That could very well increase as CWCapital recent-
ly agreed to terms with a prospective tenant that would take 15,000 sf. Last year, the property generated roughly $2 million of net cash flow,
according to Trepp. That’s set to climb if the latest lease is finalized.
Given the expected increase in cash flow and the prices at which nearby properties have traded, Britannia III should draw offers of $185/sf to $200/ sf, or up to $38.2 million. Its neighbor,
Britannia II, which has 135,210 sf and is fully leased, was sold four months ago to PSAI Realty Partners of San Francisco for $28.4 million, or $210/sf.
Britannia III was appraised last Sep- tember at a value of $30.3 million.
The property’s tenants include Cooper- Vision Inc., a contact-lens manufacturer that occupies 66,129 sf through 2021, Cooper Bussmann Inc., a maker of electrical products that occupies 23,304
sf through 2019, and trucking company
Schneider International, which leases
13,476 sf through 2020.
The property, along with Britannia I
and II, had been owned by Triple Net
Properties, a former sponsor of tenant-
in-common groups, which had acquired
the three in 2005 for $182 million, or
Since the loan against Britannia III de-
faulted, a total of $4.5 million of interest
payments have been advanced against
it. That would have to be recouped from
the proceeds of any sale. In addition,
$1.8 million of appraisal subordinate en-
titlement reductions, or ASERs, would
have to be recovered, as would other
costs and fees.
Reprinted with permission from Commercial Real Estate Direct