More than $200 million worth of office space has sold in San Mateo in the past two weeks, and in addition to bringing more than $1 million in revenue to the city, it could help San Mateo avoid losing companies as they expand.
On April 30, Foster City’s Legacy Partners announced that they had purchased the 5.1-acre, 7-story San Mateo Plaza building at 1850 Gateway Drive for just under $50 million. Four days later, the 305,000-square-foot Park Place at Bay Meadows at 1000 Park Place was sold to a group of investors working under J.P. Morgan Investment Management for approximately $152 million.
“The big thing from our perspective is the property-transfer tax,” said San Mateo Community Development Director Bob Beyer, referring to the one-time fees paid to the city and county when a property changes hands.
At approximately $5 for every $1,000 of a transaction, the plaza will bring just under $243,000 to the city’s general fund, while the larger Park Place sale will contribute $760,000. That money will likely be used to fund capital projects or put into the city’s reserves, Beyer said.
San Mateo County receives a much smaller portion, only $1.10 for every $1,000, which will bring in just over $220,000.
In addition, the reassessment of each property’s value will bring more money to the city. When the plaza offices were sold, according to Economic Development Manager Laura Snideman, the value of the land rose by $14 million. That will bring the city approximately $18,000 in additional property taxes annually.
And as San Mateo’s smaller companies begin to grow, more local office space — including the approximately 186,000 square feet of high-quality “Class A,” space at Park Place, may also help San Mateo avoid repeating some old mistakes.
“We’re trying to get to know these business so we don’t lose them like we lost YouTube and work with them to help them grow,” Beyer said.
Dunn said Legacy Partners hopes an improved office-space market will help them fill the plaza building that is currently only 75 percent occupied.
“We’ll be doing some capital improvements,” Dunn said. “Our leasing plan is to have it completely leased out within a year at market rates.”
Dunn said he doesn’t expect it to be hard to fill the office. They currently have five tenants, including Sprint.