Fenway Capital Secures Refi for Sacramento Office Property

A subsidiary of Fenway Capital Advisors has received a $16.7 million refinancing for 100 Howe, a 130,000-square-foot Class A boutique office complex in Sacramento, Calif. JLL Capital Markets secured the financing.

The five-year, interest-only loan was provided by Goldman Sachs. The refinancing offers the borrower extended flexibility, enabling a strategic exit from the investment under more favorable market conditions, according to JLL.

The two-building complex was completed in 1981 and comprehensively renovated in 2019. Its amenities include shared outdoor spaces, lounge space and a conference center, as well as ample parking. Currently, it’s 95 percent occupied with a diverse tenant mix, including the California State Lands Commission and Mutual of Omaha.

100 Howe is between Sacramento’s Campus Commons, Highway 50 and Sierra Oaks office submarkets. This location provides ready access to University Village, Howe Avenue and East and Midtown Sacramento, as well as to major freeways, public transportation and the American River Bike Trail.

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The JLL Capital Markets Debt Advisory team that represented Fenway Capital Advisors was led by Director Olga Walsh and Vice President Bharat Madan.

Fenway acquired the property from KBS Realty Advisors in late 2017 for $11.5 million, according to information provided by CommercialEdge, which rates the property as Class B.

Smaller government

Ongoing consolidation and relocation of offices by the state government has been a big factor in occupancy losses in the Sacramento office market, which have now gone on for 16 straight quarters, according to a third-quarter report from JLL. Overall office vacancy is now 21.2 percent, and although Class A direct asking rent continues to rise, so too are concessions, as overall direct asking rent declines.

Just two months ago, Manulife US Real Estate Investment Trust sold 400 Capitol Mall, a 501,308-square-foot office tower in downtown Sacramento. The asset traded for $117 million. The buyer was an entity related to Buzz Oates Real Estate, a Sacramento-based privately held commercial real estate investment management company.

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