With last sale, "Stonehenge" in Natomas comes full circle
By Ben van der Meer - Sacramento Business Journal
December 16, 2021
A decade ago, the Natomas Crossing III office project was little more than tilted walls and bare pads, stopped by a combination of previous developer hubris and a building moratorium in a flood-prone area.
What a difference a decade makes. With the recent sale of a new office building in the project, the renamed Natomas Pointe Plaza is complete, and, from a leasing and sales standpoint, a success.
In the most recent sale, 2951 Benefit Way sold to Japam LLC, with a Gold River address, for $10 million. The two-story, 20,000-square-foot building is fully occupied by Sutter Health.
No contact information was available for the buyer, which appears to target local medical office properties, according to real estate data service Reonomy.
Representatives of Tower Investments LLC, the Woodland firm that carried out Natomas Pointe, weren't available for comment. But based simply on what the firm paid for the stalled project and then what it garnered through subsequent sales after finishing it, the overall investment appears to have been worth it.
About six years ago, Tower representatives announced plans to acquire the unbuilt project out of foreclosure and finish it. The previous developer Abe Alizadeh proposed Natomas III with six office buildings during the go-go 2000s development boom, but had to stop construction between his imminent insolvency and the Natomas building moratorium ordered by the Federal Emergency Management Agency in 2008 because of flood risk. The moratorium was lifted in 2015 after the Army Corps of Engineers began work to upgrade levees.
Natomas residents began referring to the unfinished project as "Stonehenge" because of its stark, abandoned appearance.
Records on Reonomy show Woodland-based Tower bought the parcels in Natomas Crossing in a series of sales in the years since the project had stopped, from both Alizadeh's former company Kobra Properties and a mortgage lender who'd foreclosed on them. The combined price appears to be about $2.5 million.
Tower then developed each building, one at a time, and took advantage of a market period with almost no other new office construction nearby and plenty of tenant demand.
A DaVita Inc. dialysis center location at 2980 Advantage Way was first, sold in 2016 for $1.1 million. Then came 3000 Advantage Way, sold to the California State Employees Association in 2018 for $3.4 million.
Following that, Natomas Charter School bought 2920 Advantage Way in 2019 for $5.325 million, the Peace Officers Research Association of California bought 2940 Advantage Way for $3.64 million in 2020 and a related entity bought 2960 Advantage Way for $9.095 million, also in 2020.
Including the newest sale, Tower Investments earned about $32.5 million in sales in the project.
Scott Bennett of commercial real estate brokerage Colliers International Sacramento represented Tower Investments in leasing and sales on Natomas Pointe.