Barker Pacific's Managing Director Michael Barker tells GlobeSt.com that Kaiser has been a tenant in the building for 12 years and discussions are underway regarding a 10-year lease extension. Barker confirmed that the discussion is for a so-called "blend-and-extend" deal, where Kaiser commits to a longer term in trade for a reduction in rent and a tenant improvement allowance.
The building is located in the middle of four major transportation arteries, Interstate 680, Montague Expressway, Interstate 580 and Highway 237. It is Barker Pacific's first foray into the South Bay/San Jose real estate market. Barker says the $181-per-sf purchase price is about equal to replacement cost because of the "significant interior improvements" related to the special medical use.
"This building was attractive to us because we believe in the long term viability of the San Jose market and the fact that a major tenant occupies most of the project," says Barker. "The South Bay economy has a long way to go before it comes back strong but the long term real estate values of smaller buildings such as this one will remain strong because they are appealing to a certain tenant profile making it an attractive investment."
The building was acquired by Barker affiliate Hamilton Capital Partners. Sam Wright from Cornish and Carey Commercial was the listing agent on the property. Hamilton Capital Partners and Barker Pacific Group represented themselves in the transaction. Johnson Capital Group of Irvine coordinated the financing.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.