Property market booming near San Mateo Crossroads: Oracle buys Marriott Hotel, nearby office buildings sold

Not including an enhanced annual revenue stream from the reassessed property values, the city will collect $1,481,000 because of its half-percent property transfer tax, according to the city’s finance department.

Nestled against the west side of the highway, the properties are separated by another office complex along Concar Drive that sold for $130 million last year. Collectively, investors have sunk $426 million into the three adjacent properties.

Oracle, the Redwood Shores-based computer software company, made its first foray into hotel ownership last week by purchasing the 476-room, four-star Marriott.

The company’s CEO Larry Ellison reportedly owns hotels himself, however, this is the first time Oracle as a company has made such a purchase. The company’s world headquarters occupy a sprawling 60-acre campus about 4 miles away in Redwood Shores. Hospitality Investment LLC, a wholly-owned subsidiary of Oracle, bought the property from Atrium Plaza, LLC. The two closed escrow Sept. 28, according to county records and a company spokesman.

The property will continue to be available to the public, and “extensive renovations are planned to help ensure the hotel is in line with both Marriott brand standards and to provide guests with the best possible experience,” a spokesman wrote in an email.

Oracle sought the property, in part, for use as a corporate event space, according to the spokesman. The San Francisco Chronicle reported Oracle may also use the property at 1770 S. Amphlett Blvd. to host company training sessions for new employees.

“We were finding it more and more difficult to find space to conduct our training,” Mike Bangs, Oracle’s vice president for headquarters real estate and facilities, told the San Francisco Chronicle.

The property boasts 22,000 square feet of meeting space, which includes 18 “breakout rooms” and a ballroom that can accommodate 700 people, according to the San Mateo Marriott website.

The Marriott brand is continuing to expand along Highway 101, with a new 169-room Marriott Springhill Suites Hotel currently under construction in neighboring Belmont.

The $132 million price tag of the San Mateo Marriott will also be a perk to the city, which will collect $660,000 in one-time property transfer tax from the sale.

Oracle’s acquisition comes about three months after the long-standing nearby Crossroads office complex sold for $164.2 million.

The prominent 10-story glass structures at 1825-1875 S. Grant St. were bought by Beacon Capital Partners, an international real estate investment firm headquartered in Boston.

Beacon’s BCSP Crossroads Property LLC, closed escrow June 28, 2016, buying the buildings at the northwest corner of State Route 92 and Highway 101 from Clocktower Associates and Crossroads Associates, according to county records.

A spokeswoman for Beacon said the company does not typically comment on transactions.

But Beacon’s interest netted San Mateo about $821,000 in one-time property transfer tax, according to the city.

The hotel and Crossroads properties are separated by Concar Drive and another three-building office complex that swapped owners last year. DivcoWest bought 700-900 Concar Drive for $130 million in early 2015 — earning the city $650,000 in transfer tax. One of the brick and glass structures is home to Salesforce, another software company that Oracle lists as one of its competitors.

The well-established properties that house business travelers and office workers, are also slated to have new neighbors next year as construction of the Hines office complex at 400-450 Concar wraps up. Medallia, a Palo Alto-based software company, is planning to relocate its headquarters to Hines’ new construction near the Hayward Park Caltrain station.

The area will also soon be home to hundreds of new residents as Essex Property and Trust is well underway to constructing 599 apartments at the 12-acre Station Park Green site.

Other than the various headquarters garnering the interest of leading software companies, many real estate officials have cited a common theme in opting to buy, construct or move to the area — location.

Between Caltrain offering mass-transit options for workers and being centrally located between San Francisco and Silicon Valley, the real estate market surrounded by the Hayward Park juncture, State Route 92 and Highway 101 is proving valuable to San Mateo.

samantha@smdailyjournal.com

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