Sterling American Property and Hines have bought an 18-story, 383,238 sq. ft. office property in Sacramento, Calif. for $130 million. The office property at 300 Capitol Mall is home to several government agencies, among them the California State Controller’s Office and the California Department of Insurance.

The deal marks Sterling’s first major investment in the Sacramento office market. However, it is the seventh major Northern California acquisition for the Sterling/Hines joint venture since 2005.

“We feel the demand for commercial space in Sacramento will continue to accelerate as the size of the government agencies and local business expands,” says Tarak Patolia, head of acquisitions for Sterling American Property Inc.

“By acquiring this terrific asset at well below replacement cost, we are in a good position to benefit from the strong demand and increase in rental rates within the market.”