SUNNYVALE, CA-GlobeSt.com just recently reported that Salesforce.com istaking up 100% of Kilroy Realty Corp.‘s 445,000-square-foot building now under construction at 350 Mission St. and we also recently reported the company ditched its industrial portfolio and two office projects for $355 million as part of the company’s capital-recycling strategy. Now, the Los Angeles-based company makes another monster move.
Those who follow @GlobeStcom on Twitter and @GlobeStLIVE may have seen a post teasing the announcement, but the company has now acquired a fully entitled, 12-acre land site in Sunnyvale, CA, where it will develop, own and manage a 587,000-square-foot office complex for LinkedIn Corp., under a 12-year lease agreement.
KRC will invest approximately $315 million to develop the office project, which will feature three mid-rise class A office buildings and a parking structure, all designed and pre-certified to meet LEED silver requirements. The development is located along two major arteries, Maude and Mathilda Avenues, bisecting Sunnyvale and just one mile from Caltrain, providing both high visibility in this prominent Silicon Valley submarket and convenient access to multiple forms of transportation, including the nearby Central Expressway, according to a prepared statement.
Sunnyvale, with a class A total vacancy rate of less than 5%, is a highly sought after location for tenants seeking to cluster around major technology firms, including Apple, Yahoo!, AMD and now, LinkedIn, according to a prepared statement.
KRC expects to complete the LinkedIn complex in the second half of 2014 adding to the company’s under construction Bay Area development pipeline, which now includes four projects aggregating approximately 1.5 million square feet. The four projects represent a total estimated investment of approximately $800 million and are all 100% pre-leased to leading technology companies, including salesforce.com, Synopsys, and Audience, in addition to LinkedIn.
Kilroy was represented by legal counsel, Tony Natsis, partner and chair of Allen Matkins, partner Peter Roth, and associate Crystal Lofing. Natsis tells GlobeSt.com that “Kilroy Realty was the perfect fit to acquire the new LinkedIn Sunnyvale campus site. The firm has the development expertise and financial liquidity to satisfy the tenant’s needs.” He adds that “It is unique for a landlord to have the A-plus skills to do successful development as well as the capital to make sure a project like the LinkedIn campus can happen.”
DiNapoli was represented by Allen Matkins’ partners Pamela Andes and Sandra Jacobson.
“We’re delighted to partner with LinkedIn in the creation of a new LEED-certified office facility,” says John Kilroy Jr., KRC’s president and chief executive officer, in a prepared statement. “This is another opportunity for us to create significant value for our shareholders through the development of the highest quality real estate at superior returns.”
Sherman Chan and Bob Steinbock, both senior vice presidents at CBRE, acted as investment brokers in the transaction.