I would like to see it converted to residential.
Bay Area firm eyes 2nd office buy near Sacramento’s downtown arena
BY BOB
SHALLITBSHALLIT@SACBEE.COM
A Bay Area investment firm that recently acquired one prominent downtown Sacramento building is poised to scoop up another, convinced the area around the new Kings arena could one day mimic San Francisco’s booming AT&T ballpark district.
Swift Real Estate Partners last month completed a $26 million purchase of a five-story building at 630 K St., just to the east of the Kings arena construction site. Now it’s closing in on a second deal to buy one of the city’s under-appreciated gems – the Capital National Bank building at Seventh and J streets, according to Swift founder Christopher Peatross.
Both deals are based on a belief that Sacramento’s downtown will flourish in coming years, thanks to city efforts to upgrade key downtown corridors, improve public transit and, most significant, contribute to a new sports and entertainment facility.
“(The arena) is one the best things that ever could have happened for Sacramento,” Peatross said. “It’s just the sort of catalyst needed to turn things around.”
Peatross, who raised $330 million to establish his real estate investment fund, said he’s not planning any immediate changes at 630 K. But he said the building – a onetime JC Penney location – eventually will be the site of a major entertainment and restaurant complex like those that have sprouted in the area near the San Francisco Giants’ ballpark.
“There’s a restaurant there called Momo’s, where it’s always standing-room only,” Peatross said, citing one example.
“This,” he said, referring to the 630 K site, “is Momo’s.”
As for the century-old, seven-floor Capital National Bank building at 700 J St., Peatross said his firm has “locked it up” and is completing its due diligence before closing on a deal.
The historic granite building, finished around 1915 with distinctive rounded forms and terra cotta nudes perched on the sixth floor, is owned by local investors and was recently placed on the market by the Sacramento office of Jones Lang LaSalle. JLL executives declined to comment on any pending sale.
Peatross said the bank building – which bears exterior signage for its most recent anchor tenant, First Northern – needs more rehab than 630 K and has low occupancy.
“We have work to do there,” he said. But he said the 82,000-square-foot building has enormous potential and a great location. “It’s close enough that it’s still a part of what’s going on at the arena,” he said.
A marketing brochure for the J Street property calls it a “jewel box,” whose ground-floor banking lobby with high ceilings and arched windows is ideally suited for restaurant and retail space.
Swift, which was founded in 2010, has been buying up property mostly in the Bay Area. It has made offers on Sacramento buildings over the past two years, Peatross said, but “we were always bridesmaids.”
Now it’s looking at more deals here to take advantage of a market in transition.
“Sacramento’s day is coming,” he said. “It’s only getting better.”
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