East Bay Office Complex Flipped for More than $47 million

October 20, 2016 • Posted in: Market News

The 191,000-square-foot Diablo Technology Center in Pleasanton’s Hacienda Business Park has been sold by Ridge Capital Investors LLC and equity partner Contrarian Capital Management LLC for more than $47 million, according to a source familiar with the deal. The buyer was not disclosed.

The two companies purchased the complex last May for $35 million and invested another $3 million inexterior and interior renovations, which were completed earlier this year.

The three-building R&D and office complex at 5735 West Las Positas Blvd., 4511 Willow Rd. and 5870 Stoneridge Dr. is fully leased out to 11 different tenants that include energy management company Schneider Electric (Euronext: SU), homebuilding company PulteGroup, Inc. (NYSE: PHM) and contact lens manufacturer CooperVision, Inc. a unit of the Cooper Companies (NYSE: COO).

Steve Golubchik, Mike Zylstra, Grant Lammersen, Forrest Gherlone, and Tim Walling of brokerage Newmark Grubb Knight Frank handled the sale.

Greenwich, Conn.-based Contrarian Capital Management LLC has gained a reputation for turning arounddistressed properties. The company previously partnered with Ridge Capital to buy Oakland’s Latham Square at a foreclosure auction for $12 million in 2014.


After spending $17 million in renovations, occupancy at the 114,000-square-foot office building rose to 90 percent and rents jumped up from $33 per square foot in 2014 to $54 per square foot for newly renovated space. That building is now also for sale.


The East Bay R&D office market has benefitted from technology companies driven out of San Franciscoand the Silicon Valley in the pursuit of less expensive and more available space. Tesla’s expansionplans in Fremont have also created increasing demand in the I-880 and I-680 corridors for building out a technology manufacturing infrastructure.

In Pleasanton, the R&D office market has generally outperformed Class A commercial space with less vacancy volatility and stickier rents.

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