A fully leased office and industrial park visible from Highway 50 in Sacramento County has a new owner: prolific investor Ethan Conrad.
Conrad said he bought the Sierra Business Center at 3050 Fite Circle late last week for $9.5 million from a division of Portland, Oregon-based Randall Group Inc.
Opened in the late 1980s, Sierra Business Center has seven buildings and 141,000 square feet of space, fully occupied. But Conrad said in an email the price was low because there’s a mismatch in the operating plan.
“The upside and value-added component of this property is the fact that the current rent overall is significantly below fair market value and the expenses are significantly above fair market value,” he said.
Randall Group, which still shows the property on its website, did not return a message seeking comment Monday. The company still appears to own about a dozen apartment properties in the Sacramento region, as well as five commercial retail/industrial properties locally.
Under the name California Workspace LLC, Randall Group bought Sierra Business Center in 2001 for an undisclosed price.
Because it’s in a more suburban area, in unincorporated Sacramento County between Sacramento and Rancho Cordova, the property has more upside than a property in a more urban location would, Conrad said. Because of their relative proximity to workers who may have hybrid schedules between working in an office and working from home going forward, suburban office properties are expected to fare better in a post-Covid-19 world.
Ethan Conrad Properties Inc. will carry out what Conrad said would be a light remodel of Sierra Business Center, including new paint, resealing and striping the parking lot and improving landscaping. Other improvements and repairs will help make the property look great again, he said.
For Conrad, buying the property is a bit of a return to where he started in commercial property investment. When the property was brand new, he said, he and many other commercial brokers at the time attended a lavish grand opening with, among other components, sand volleyball courts and a passel of bikini-clad women.
A half-decade later, he said, his first commercial property investment was 3123 Fite Circle, next to Sierra Business Center.
Palmer Capital Inc. brokered the sale.
