LaSalle Investment Management is close to selling an office complex in Walnut Creek, California for $221m (€189m) less than two years after acquiring it for $158m.

Hines and Oaktree Capital Management are in the process of buying the 515,306sqft Ygnacio Center from one of LaSalle’s value-add real estate funds, according to sources with knowledge of the transaction.

LaSalle, which declined a request for comment, bought the three-building office complex for LaSalle Income & Growth Fund VII, according to a board meeting document from the Contra Costa County Employees’ Retirement Association (CCERA).

The fund, in which CCERS is an investor, raised $510m to invest in real estate that requires physical improvements and/or re-leasing.

Value-add real estate managers have recently told IPE Real Assets that economic, financial and supply conditions favour their strategies.

Sources close to the Ygnacio Center transaction say it reflects a trend of institutional investors looking beyond the San Francisco office market, where assets can trade at more than $700 per square foot.

Ygancio Center is priced at $420 per square foot, and the Walnut Creek market is still expected to experience strong rental growth, the say.