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COMMERCIAL REAL ESTATE: Basin Street breaks ground on Fountaingrove project this fall

Petaluma-based Basin Street Properties plans to break ground this fall on the third of four buildings approved for a northeast Santa Rosa class A office development called Fountaingrove Executive Center, according to Vice President Scott Stranzl.

The city Design Review Board on June 21 approved modifications to the design of the third building, to be built on nearly 5.5 acres of vacant land at 3560 Round Barn Circle. The most significant change to the three-story building is a reduction in leaseable space to 65,000 square feet from 80,000 when the board first approved the design of all four buildings in 2001.

Mr. Stranzl said the size of the building was reduced so that the parking ratio could be maintained at four spaces per 1,000 rentable square feet while doing away with an expensive podium-style parking structure designed for the development.

The building will be ready for tenants around fall 2008.

Currently, Basin Street is in lease negotiations with a small initial tenant for 3560 Round Barn Circle as well as with subsequent tenants in a 56,000-square-foot class A office building completed recently in the Redwood Business Center development in north Petaluma.

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Larkspur-based commercial real estate developer Venture Corp. continues to look for a Santa Rosa location to build one of its commercial condominium projects.

In the meantime, the company has broken ground on a second one in the East Bay and is looking to expand the concept into Utah and Texas. At the same time the company is launching a deferred-down-payment financing program.

About four years after the first Venture Commerce Center came out of the ground in Morgan Hill, the company has broken ground on its 53rd Venture Commerce Center or Venture Professional Center project, which is 30 for-sale commercial condos at the company’s second site in Dublin.

The slowdown in housing sales, especially in markets such as Sacramento, has been dragging on commercial condo sales, because about a quarter of Venture's buyers are in residential real estate and others use home equity to buy the properties, according to CFO Jim Burck.

To help with the 10 percent down payment often required for commercial property loans from the U.S. Small Business Administration and banks, Venture has helped 25 buyers so far by financing their down payments over three years at the same interest rate as their mortgage. The first annual payment comes a year after the close of escrow.

Because Venture's equity partners in the commerce and professional centers such as GE Capital, Lehman Bros. and Met Life often don't want to get involved with small, short-term loans, Venture takes the notes receivable and exchanges them for notes payable from its bank, Mr. Burck explained.

In fact, such venture partners came on board only after more than a half-dozen projects in the South Bay and East Bay were built and completely sold.

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Dallas-based The Regus Group, the world's largest executive-suites company, opened a 17,000-square-foot location June 25 at the Petaluma Marina Office Center, 755 Baywood Drive in Petaluma. This is Regus' second North Bay location, following one in San Rafael.

The location has 64 offices, 117 workstations and two conference rooms. The Petaluma center is offering a couple of months of free rent to spur leasing. A couple of tenants have already taken advantage of that offer, according to a company spokesman.

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Paul Donaldson is back as general manager of a Ghilotti construction company. He joined Glen Ghilotti's general engineering contraction company Team Ghilotti in Petaluma earlier this year.

Most recently in his 20-year career in construction, Mr. Donaldson was at Christopherson Homes and Ghilotti Construction, both in Santa Rosa.

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Submit items for this column to Jeff Quackenbush at 707-579-2900 ext. 206, jquackenbush@busjrnl.com or fax 707-579-8475.