DC Station Benefits from Robust Updates and Leasing

Harvest Properties and an affiliate of Cerberus Capital Management LP recently sold DC Station, a 385,000-square-foot class-A office building and adjacent seven-level parking structure in Daly City. Oakland-based Harvest and Cerberus acquired the asset located at 2001 Junipero Serra Blvd. in April 2018.

The team was able to unlock significant value through property enhancements and strategic leasing efforts. DC Station benefited from a transit-oriented location, large and flexible floorplates, recently completed on-site amenities, and overall asset quality relative to its replacement cost and other comparable trades in the marketplace.

Approximately 70 percent leased at the time of acquisition, the partnership implemented an active leasing program that resulted in the execution of more than a dozen leases, exceeding 105,000 square feet to bring the occupancy to more than 90 percent by early 2020.

“DC Station was an under-leased but high-quality transit-oriented asset that we were able to acquire at a compelling basis,” said John Winther, managing partner at Harvest Properties. “Our acquisition thesis was not only proven through our successful office leasing but later expanded upon by getting ahead of migration trends in both the office and the life science segment of the market.”

The partnership identified strategic opportunities with the expansion and migration of life science beyond South San Francisco into neighboring markets including Daly City. Completing the necessary feasibility analyses to confirm the building could accommodate life science users, the partnership paved the way for a potential conversion of the asset for life science use to capitalize on both the leasing and capital markets demand.