SUNNYVALE, CA-CapRock Partners has expanded its portfolio to 13 properties containing almost 600,000 square feet of industrial space with the acquisition of a 31,657-square-foot office / R&D building in Sunnyvale, CA. For the Irvine, CA-based company, the local market is hot.
“We have been following this market for sometime,” explains Jon Pharris, a principal and director of acquisitions for CapRock Partners. “The area is a veritable hotbed of technology.”
Located at 814 San Aleso Avenue, the property is in the Peery Park section of the city with its wide mix of retail, hotel and service amenities as well as office facilities housing many major corporations. It also provides excellent access to the 101, 237 and 85 freeways, according to a prepared statement.
“Apple, LinkedIn and other major tenants have been snapping up space in Sunnyvale, with Apple alone leasing more than 1 million square feet in several buildings to house up to 5,000 employees,” explains Pharris. “We are anticipating that all of the corporate activity will displace many of the existing companies in the nearby submarket. Our building will fit a niche for many of those displaced companies in the market.”
The building sits upon a 1.82-acre parcel of M1-zoned land and was completely renovated in 2000. It features 100% HVAC, drop ceilings, 16′ clear height, automated grade-level doors and a fenced yard area. The parking ratio is 3.4 stalls per 1,000 square feet.
CapRock recently acquired the fee-interest in the property in a transaction brokered by Greg DeLong and Joshua Berger from CBRE, who represented CapRock. The seller was represented by Bob Kinceloe and Jim Beeger from Colliers International.
Further terms of the acquisition could not be disclosed.
CapRock has performed renovations to the property, which is vacant, and is now offering the building for sale or lease with the marketing being handled by CBRE’s DeLong and Berger. Offered at $1.65 NNN per square feet per month, it is one the most attractively priced properties in the area.
Patrick Daniels, COO of CapRock Partners, says that “As the economy continues its turnaround, these types of high-quality units will only get tougher to find, so we are confident about the return we will achieve for our investors on this project.”
GlobeSt.com recently chatted with Amber Schiada, a research manager at Jones Lang LaSalle on the subject of employment levels in Northern California. She noted that in Stockton, in the Central Valley, employment levels won’t get back to pre-recession levels until late 2020, thanks to its full-on exposure to the housing bust. We then asked her how Sunnyvale is fairing, and how it looks to investors thanks to the new above and she notes that “With tenants left with few options to choose from in Palo Alto and Mountain View, demand has shifted south toward Sunnyvale.”
In the last year, she tells GlobeSt.com, asking rents in the Sunnyvale market have increased by 12.3% to about $4.09 per square foot (full service) per month on average. “Space is disappearing quickly and developers are viewing this as an opportunity; more than 1.6 million square feet is currently under construction or undergoing renovation, but about two-thirds of this space has already been spoken for,” she says.