PALO ALTO, CA–Kirk Trammell and J.J. Taughinbaugh of Marcus & Millichap Real Estate Investment Services, have facilitated the sale of eight key Silicon Valley redevelopment sites along the El Camino Real corridor. Total consideration for the transactions is $71.1 million.
“The employment gains and flow of venture capital dollars that returned in earnest to Silicon Valley in 2010 created a strong combination of factors that brought about double-digit multifamily rent growth, robust demand for office space and contributed to the ongoing recovery in the hotel sector,” says Steve Seligman, vice president and regional manager of Marcus & Millichap’s Palo Alto office. “This growth also initiated a flurry of construction in the region and investors continue to pursue development opportunities in the area’s under-utilized locations.”
The section of the historic El Camino Real mission trail that runs through the San Francisco Peninsula and Silicon Valley, known locally as the “El Camino Corridor,” is in the midst of a large-scale revitalization project and its transformation is providing many redevelopment opportunities for commercial real estate investors.
“Marcus & Millichap’s Palo Alto office is closely acquainted with this submarket and two of our senior investment specialists, Kirk Trammell and J.J. Taughinbaugh, have been particularly successful in identifying redevelopment project sites for clients,” adds Seligman.
In October 2013, Trammell, a senior vice president investments, and Taughinbaugh, a vice president investments, arranged the $12.35 million sale of a 2.5-acre redevelopment site located in Sunnyvale. The existing structures will be replaced by 87 single-family townhomes.
“The employment and housing booms in Silicon Valley, along with the Grand Boulevard Initiative (GBI), are creating significant opportunities for investors,” says Trammell. “The GBI is an ongoing regional collaboration dedicated to the revitalization of the El Camino Real corridor as it runs through San Mateo County and Santa Clara County.”
From March 2012 to the present, Trammell and Taughinbaugh have sold six additional El Camino Real corridor properties totaling $43.9 million. In August, the pair arranged the sale of a 1.6-acre parcel at in Mountain View, which will see the development of 150 new multifamily units.
“We are witnessing the transformation of older retail properties and apartments with deferred maintenance into new multifamily assets with high floor-to-area ratios,” says Taughinbaugh. “This activity is neither a new trend nor has it reached its peak. The more than 5,000 market-rate apartment units under construction in the South Bay indicate that the current building boom will last into 2014.”
Another of Trammell and Taughinbaugh’s transactions to have come full circle is the site of the former Palo Alto Bowl and Motel in Palo Alto. The two agents arranged the sale of the iconic bowling alley in 2007 for $14,850,000. The project weathered the Great Recession and is now home to a 138-room Hilton Homewood Suites hotel that is currently under construction and Classics at Monroe Place, a single-family residential project that includes 10 detached residences and 16 duets.