Strong Job Growth Keeps Commercial Real Estate Humming
By Shelly Meron/Business Writer
TheReporter.Com
Jim Gray, of NAI BT Commercial discusses the features of an office suite in a new building on Burton Drive near Nut Tree Road. (Joel Rosenbaum/The Reporter)
Residential real estate may be struggling these days, but commercial real estate isn't seeing the same tough times. That's good news for Meridian Property Company, the developer responsible for three new office condominium buildings known as Meridian Professional Center on the corner of Burton Drive and Nut Tree Road in Vacaville.
"There's clearly a lot of uncertainty in the overall real estate market," said Jim Gray, office and investment broker with NAI BT Commercial Real Estate, a firm working with Meridian to lease or sell the space. "In the business real estate market, there's changes, but nothing like what you're seeing in residential. There's still job growth. You still have doctors and lawyers and accountants who need good quality spaces to provide their services from."
Gray said Vacaville in particular was the perfect place for a large commercial building.
"You've got a lot of job growth taking place on the I-80 corridor," he said. "For many professionals, you could actually own an office space cheaper than you could rent it, or as cheaply as you could rent it. There was also a very clear guess that with the significant investment that was taking place at Genentech and State Fund and Kaiser and NorthBay (Healthcare), this was going to be a pretty fundamentally-sound, safe place to build professional offices."
Two of the buildings are one-story tall and about 14,750 square feet. The third building is two-stories tall and has about 33,600 square feet. Each building can be broken down into individual units, with the smallest possible unit at 1,400 square feet.
Gray said he is hoping to sell the two-story building as a whole, and hopes to sell or lease the other two buildings as wholes or in parts.
"We think that there might be some large users, some good sized businesses, that would be attracted to the fundmanetals of this location and building design," Gray said.
Currently, Gray said he is in "active negotiations ... with both professional and medical users for their own ownership suites," but would not specify who he is negotiating with.
Prices for the spaces range depending on size. The smallest possible unit, at 1,400 square feet, would sell for about $400,000. The entire two-story building, at about 33,600 square feet, would go for about $9 million.
Gray said that tenants who would lease or buy space in the near future would likely be able to move in in early 2008. That's because the buildings have their "shells" - walls, windows, bathrooms, and so on - complete, but the spaces do not include "tenant improvements," which are customizations that are made based on the needs of the business.
"You don't know exactly - is the space for a dentist or an engineer, or a technology company or an insurance company or a surgery center?" Gray said.
The flexibility to customize the spaces for each business is what makes Meridian Professional Center that much more appealing. Although it was initially deemed a medical building, Gray said it could easily accommodate other types of businesses and is very attractive because of its location.
"When you have this good, high-quality design, coupled with extra parking and amenities, those retail customers like that kind of facility," Gray said. "So, while this got pigeon-holed as a medical building because it's so close to a hospital and it's been designed to meet medical needs, this is not just a medical center. If a bank, or a large engineering firm, or a consulting company needed to serve the Bay Area and Sacramento area, it's a great location."
The Burton Drive complex will be available for for tenants by early 2008. (Joel Rosenbaum/The Reporter)
Shelly Meron can be reached at business@thereporter.com.
