One of the three buildings on the Appfolio campus in Goleta was purchased by an investor for $13.9 million.
The building is located at 50 Castilian Drive.
The leasehold interest sale was of the building itself, combined with a 99-year ground lease on the underlying 3.35-acre parcel. The building was leased by Appfolio with more than 10 years remaining on the lease, which provided a 5.37% capitalization rate to the new owner.
The seller was a joint venture by Shopoff Realty Investments, Praelium Commercial Real Estate and Blackbird Investment Group. Representing the seller were Sean Fulp & Matt Berres of Newmark and Steve Hayes & Francois DeJohn of Hayes Commercial Group.
In December 2020, the joint venture purchased the 165,905 square feet of office space on 10.82 acres. By dividing the asset into three buildings and presenting them for sale separately from the land, the owner was able to set them at a lower price point, reaching a larger pool of potential buyers, according to a news release from the Hayes Commercial Group.
The remaining two buildings are at 70 and 90 Castilian Drive and are still for sale.
“NNN-leased investment property like this is in demand in our market,” according to the news release. “We are seeing considerable interest in assets in this price range, including the other two buildings at this location. There are vastly more $10 to $15 million buyers than we would see for the whole campus, so selling the buildings individually was a creative disposition strategy by the venture.”
Appfolio is a publicly traded software-as-a-service company with a $3 billion market cap. It employs an estimated 600 employees.
The company began leasing space at 50 Castilian Drive, which is a two-story, 43,655 square-foot creative office building, in 2011 and since has expanded into the entire campus for its corporate headquarters.