Ten years after it was built to suit for a federal government agency, a building in El Dorado Hills has sold as a sought-after leased investment.
With more than 10 years left on the U.S. Bureau of Land Management’s lease, 5152 Hillsdale Circle sold for $6.75 million to a Sacramento-based family office.
Scott Briggs, a director with Stan Johnson Co. who brokered the lease, said a leased building with a government tenant is particularly attractive.
“They don’t move very often,” Briggs said, meaning there’s a good chance BLM may ultimately opt to stay longer than the initial lease term.
Records from real estate data site Reonomy list FBLM A CA LLC as the previous owner for 5152 Hillsdale Circle, built in 2009. Briggs said the previous owner built it specifically for the BLM with a 20-year lease at the time.
The building of 17,500 square feet is solely occupied by the federal agency, with the lease guaranteed by the federal government. Because of the building’s strong maintenance and lease parameters, the new owner has relatively little to do, Briggs said.
“This is pretty passive, mailbox money kind of deal,” he said.
Briggs said the deal was unusual because the new owner, who closed the sale on July 18, was locally based. Having familiarity with the market played a role in the buyer’s successful bid, which came in at 97% of the list price and beat out several competitive bids.
In such situations, Briggs said, as many as 70% of the buyers for such a property will be investors from across the U.S. and elsewhere. The new owner bought the building as part of a 1031 exchange to avoid capital gains tax on another recent sale.