The portfolio includes a mix of 1980s and 1990s low-rise office and R&D properties in Santa Clara (Marriott Business Park), Mountain View (Synopsys campus) and Milpitas (Milpitas Business Park and the Quantum/Maxtor campus), and other properties in Sunnyvale and San Jose.

The portfolio's vacancy was reportedly in the 30% range when the portfolio first came to market early last year, but leasing activity has picked up since that time. Rreef likely would divvy up the portfolio between its core and value-add funds, according to local investment brokers.

Rreef, with some $27 billion under management, is said to be the third buyer to make a play for the 119-building Silicon Valley portfolio. Apollo Real Estate Advisors and Westcore Properties previously took runs at the portfolio, according to published reports. Calls to Peery-Arrillaga and Rreef were not immediately returned Monday afternoon. CB Richard Ellis, the listing brokerage firm, declined comment.

Locally based Peery-Arrillaga was founded by Richard Peery and John Arrillaga. The billionaires are reportedly selling assets as part of a plan to simplify their lives now that they are in their mid 60s. In August 2005, the company sold the 20-building, nearly one-million-sf Westport Office Park in Redwood City to Prudential Real Estate investors of San Francisco and Harvest Properties of Emeryville for $238 million.

Another five-million-sf Bay Area portfolio also is changing hands. New York's Blackstone Group is acquiring all of the outstanding shares of CarrAmerica Realty Corp., a public company with a 26.4-million-sf portfolio, including about 5.1 million sf in Northern California. At $44.75 per share, the all-cash deal totals out to $5.6 billion.