The long-vacant Fireman's Fund office complex in Novato, Calif., might become the site of a mixed-use development with potential use as office space, housing and retail, according to a real estate agent familiar with the negotiations.
The current owner, the Manhattan-based DW Partners, acquired the property in late 2019 after it went into foreclosure and is in negotiations with potential developers, said Brian Eisberg of NAI Northern California.
"This is possibly the largest foreclosure that's happened in Marin County, certainly in Novato," said Eisberg, who is the office vice president and managing director of office leasing at the firm's San Francisco office.
Eisberg said he has been acting as an informal real estate agent for the property and handling the leasing negotiations while the San Francisco-based Jones Lang LaSalle Inc. is the representing real estate firm.
For now, Eisberg said he could not provide further details about whom DW Partners is in negotiations with, but said more information should be available in the near future. DW Partners did not respond to requests for comment.
Business sectors that could be targeted for the property include biotechnology, video game companies and possibly health care, Eisberg said. A small amount of retail is also likely such as a coffee shop or laundromat and a hotel could potentially be another use, Eisberg said.
Novato Community Development Director Vicki Parker said the property at 777 San Marin Drive is zoned for business and professional office uses "so most any other use would require a general plan and zone change."
Local business officials expressed mixed reactions to the potential housing-office hub proposal. Novato Chamber of Commerce CEO Coy Smith said he is pleased the property is finally seeing some movement after all this time, but had reservations about housing there.
"While the Chamber is usually always not in support of reducing the amount of land in Novato available for commercial, light industrial and retail space -- we are interested to hear the ideas of the developer," Smith wrote in an email. "This is a large parcel and the possibilities are exciting to consider. Mixed use had been successful and not successful in various locations around the state, so until a design is presented we cannot say that we would support or not support a mixed-use development."
The close proximity of the property to the San Marin SMART train station as well as the current landscape design of the site presents tremendous opportunities, said Haden Ongaro, executive vice president with the Newmark Knight Frank real estate firm and the Marin Economic Forum board chairman.
"Marin is pretty well known by the community that we need more housing and so businesses here are looking to hire and recruit to the area," Ongaro said. "And in order to do that we need housing and there's been very little construction and the people that want to stay in Marin that grow up here like I did there is not a lot of opportunities."
The 62-acre property was formerly owned by American Assets Trust and went into foreclosure in late 2019.
Fireman's Fund Insurance Co., acquired by the German insurance company Allianz in 1991, had occupied the complex between 1982 to 2015 before it relocated to Petaluma. Fireman's Fund had been leasing the building for nearly 15 years from American Assets Trust, which had purchased the property from Fireman's Fund using a loan.
After the lease expired in 2017 and no mortgage payments were being made, the loan came due and the property went into foreclosure, according to Steven Leonard of the Cushman & Wakefield commercial real estate company, who had represented former tenants of the buildings.
DW Partners was the lead lender and had a controlling interest in the loan, Eisberg said. In September, American Assets Trust, under its subsidiary Novato -- 777 San Marin Drive, LLC, signed a deed in lieu of foreclosure with DW Partners' subsidiary DW FF 1, LLC, in which the company also took on the $110.2 million in unpaid debt and associated charges on the property, according to county documents.
The property had been vacant since Fireman's Fund Insurance Co. departed. Rumors circulated of Google potentially eyeing the property in the interim, which Leonard said were unfounded.
While potential developers had been "kicking the tires" through the years, Leonard said 700,000 square feet of office space is not something the local market is favoring. Part or all of the three-building complex could likely be raised to make way for other commercial space or housing, he said.
"It's a great piece of property," Leonard said.
Eisberg said a potential rebuild or renovation is something that is being considered, but that further study of structural and code upgrades would need to be performed.
"That's part of the due diligence that will go into the next phase of the sale," he said.
