2330 E Bidwell St 39,062 SF 70% Leased Office Building Folsom, CA 95630 $10,913,619 CAD ($279.39 CAD/SF) 5.75% Cap Rate

2330 E Bidwell (the “Property”) is an upscale two (2) story medical office building located in Sacramento’s most desirable suburb of Folsom. The Property sits squarely in a medical hub anchored by Dignity Health - Mercy Folsom Hospital located less than 1 mile away. The Property measures approximately 39,062 rentable square feet and is leased to a diverse and stable mix of medical and office tenants including Vitero Retinol Medical Group, Folsom Spine Surgery, HMA Architecture, and West Valley Construction. The Property is currently 80% leased to 13 tenants paying an average rent of $1.88 per square foot, fully serviced, which is approximately 50% below the average market rent for comparable medical space nearby. The Property is the largest of ten office and medical buildings constructed in 2000 as part of an association-managed development known as Broadside Village.
Given the Property’s proximity to existing medical uses and practices, Mercy Folsom Hospital, and several new state-of-the-art medical campuses, the Property is in a unique position to capture the growing demand for medical office space nearby. Medical-related tenants currently occupy one-quarter of the Property paying an average rent of $2.23 per square foot, which is approximately 18% higher than the average rent among traditional office tenants also in the Property. Over time, a value-add strategy can be implemented to transition the entire tenancy into medical-related practices, which command a higher base rent than traditional office tenants and generally result in longer term commitment to the Property. Alternatively, the entire second floor of the Property measuring approximately 20,000 square feet can be made available to an owner-user as soon as Q1 2029 and the entire building by Q1 2031.
The Property has three vacant spaces totaling 7,644 rentable square feet, or approximately 20% of the building. Assuming lease-up of the vacancy, including lease-up costs, 6 months of carry, 6 months of free rent, $65 per square foot in tenant improvements, and commissions, the 2027 pro forma cap rate is 8.10%. Assuming 60% LTV, financed at 6.5% with a 25-year amortization schedule, the cash-on-cash return (not including principal paydown) when the Property is fully leased is 10.80% per year.
However, as the leases expire over time and the tenancy is transitioned to a medical-centric tenant mix, it is entirely reasonable to assume the Property will achieve market medical rents of $2.50+ per rentable square foot inclusive of the load factor ultimately providing ownership with a stabilized annual yield of over 12% within 48 to 60 months of acquisition. Assuming a 7.0% cap rate disposition in 2030, the proforma value of the Property could exceed $12 million ($300 per square foot) providing a strategic investor with a highly reliable income in the meantime.
Folsom is a highly desirable and affluent community in Greater Sacramento. It combines a high standard of living, a well-educated population, excellent schools and a business-friendly community – making it a fantastic alternative for professional services, tech/life sciences companies exiting the expensive and seismically active Bay Area. Users will appreciate the quality, low-cost alternative with immediate occupancy in the most seismically stable region of California with very inexpensive utility rates and a municipal utility company created to attract and retain business.