With the real estate marking bouncing back, county officials are considering selling off two office towers they purchased for $40 million in 2011 with hopes of escaping pricey department rents but ultimately leased out itself to a telecom company.
“We’re going to see if now is a good time to sell,” said Deputy County Manager Peggy Jensen. “We bought the buildings when the market was low and it’s significantly improved by now.”
Jensen said officials don’t have a fixed number in mind but the Board of Supervisors on Tuesday will name a negotiator and engage a broker to test the waters.
The county purchased 1 and 2 Circle Star Way, two four-story office buildings plus parking, also as a way to relocate 911 dispatch but discovered making the facilities compliant would cost more than constructing an entirely new building. The county’s space needs also downsized, according to County Manager John Maltbie at the time.
In April, SoftBank Corp. contracted to rent out the 103,948-square-foot tower at 1 Circle Star Way. In July, county supervisors approved the lease for its 103,904-square-foot sister property, 2 Circle Star Way. Between the two, after broker fees and up-front improvement costs, the county stands to rake in more than $6 million in yearly revenue and more than $30 million over the seven-year life of the agreement.
Softbank is a telecom company which owns a majority of Sprint Nextel. Jensen said so far it has been a good tenant for the county.
At the time of the buildings’ purchase, the county didn’t specifically discuss a possible sale down the road but Jensen said they were always optimistic it would be a win for county coffers.
“We always thought the buildings would be a good investment,” she said.
The Board of Supervisors meets 9 a.m. Tuesday, Nov. 5 in Board Chambers, 400 County Government Center, Redwood City.
(650) 344-5200 ext. 102