A seven-building Silicon Valley tech office campus has been scooped up for 46% less than its last trading price in 2019.
An affiliate linked to Tidewater Capital has acquired the 431K SF R&D complex in Sunnyvale for $101M, a steep discount from the $188M that partners Goldman Sachs and Hines paid for the property in 2019, SiliconValley.com reported.
The sale price for the 22-acre campus, known as Sunnyvale Park Place and located near the corner of De Guigne Drive and Stewart Drive just off the Lawrence Expressway, also was significantly lower than the asking price of $140M when Goldman and Hines tapped CBRE to market the campus in January.
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According to a Green Street alert in January, Sunnyvale Park Place was about 60% leased with a weighted average remaining lease term of 5.5 years. The report said that Bank of America held a mortgage on the property.
The pitch for the property suggested a that a buyer coming in at a lower basis could offer competitive rents to boost occupancy and earn a higher stabilized yield, with existing tenants and strong weighted average remaining lease term providing stability.
Goldman and Hines paid about $436 per SF to acquire the Sunnyvale campus in 2019 from Deutsche Asset Management, when the campus was known as Oakmead West and was 96% leased. The campus is in proximity to a Caltrain station, with two other train stations accessible via a free shuttle that stops at Sunnyvale Park Place.
In January, the partners said they willing to accept separate bids for the East Campus and West Campus at the Sunnyvale complex, which was built in 1998. They estimated the value of the 206K SF East Campus at $62M, while the West Campus was expected to attract bids of $78M.
At the end of Q1 2024, the overall vacancy rate in Silicon Valley was 21.9% according a market report from JLL. Office valuations in San Jose have been dropping recent months.
In December, an office building at 303 Almaden Boulevard sold for 70% below its prior price. In February, a two-building office complex at the corner of West St. John Street and North Market Street was bought at a 77% reduction from its previous purchase value, SiliconValley.com reported.
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