KKR's fund KKR Real Estate Select Trust has acquired HQ @ First, a 603,000-square-foot office campus in Silicon Valley, from Japanese developer MORI TRUST CO. The property is currently fully leased to an investment-grade tenant. The sales price of the campus was not disclosed.
Located in North San Jose, the property is a trophy asset, featuring 60,000 square-feet in lab space and it has a LEED certification. According to KKR, the property is part of the fund, KREST's single-tenant investment strategy, which targets high-quality properties leased to a single tenant on a long-term basis. With this purchase, KREST has a portfolio totaling more than $1 billion.
In addition to focusing on single-tenant properties, the fund is also targeting assets on the West Coast. In the last 24 months, KKR has acquired $4 billion in properties through its real estate funds, including major purchased in the Bay Area market. In April, KKR purchased The Exchange on 16th, a 750,000-square-foot office complex in San Francisco's Mission Bay submarket, from Kilroy Realty Corp. for slightly more than $1 billion. Longfellow Real Estate Partners, a life science focused real estate developer and manager, will work with KKR to operate the property. KKR made the investment through its core-plus real estate strategy.
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It is growing other aspects of its business as well. In June, KKR & Co. launched My Community Homes, a single-family management company to purchase and manage rental homes across the US. And in March, KKR acquired a five-building industrial portfolio in Phoenix for $68 million. The 540,000-square-foot portfolio comprises five last mile warehouses, located in submarkets near downtown Phoenix. Each property features an average clear height of 25 feet. The portfolio was 100% leased at closing.
In the purchase of HQ @ First, Newmark vice chairman and head of Northern California capital markets Steven Golubchik, vice chairman Edmund Najera, senior managing director Jonathan Schaefler and director Darren Hollak brokered the deal.
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Kelsi Maree Borland
