PREI, Martin Group Plan Valley Office Projects

"We are going through entitlement process for both properties," he says. "It's probably a six-month process to get the project approved and the working drawings complete. Construction will start shortly thereafter."

The first building will be located in Moffett Business Park at 399 W. Java Dr., immediately adjacent to the Yahoo headquarters and the Valley's mass transit rail line. As proposed, the seven-story building would hold 200,000 sf of high tech office and qualify for LEED certification from the US Green Building Council. RMW Architects of San Jose have been hired to design the building, and Devcon Construction Inc. will be the general contractor. Christian Marent of CBRE will be the leasing broker.

The second property is 384 Santa Trinita Ave., just off Lawrence Expressway at Arques Avenue. PREI and the Martin Group of Cos. are planning a 100,000-sf building that would stand four stories high. Devcon has been hired as the design-build general contractor. Mike Connor of NAIBT Commercial will be the leasing broker.

"We are beginning a new generation of development in Silicon Valley," says J. David Martin, chairman of the Martin Group of Cos. "During the 1980s, we developed mostly one-story tilt-up buildings. During the 1990s, we created multi-story tilt-up buildings. Today, as the market and many of the tech companies we serve have matured, we are proud to be creating a new generation of well-designed class A, steel-frame, LEED-certified projects."

The triple-net asking rate will be in line with current market rents for new class A space, which is $2.75 per sf per month, or $33 per sf per year. Operating costs are expected to add another $9 to $10 per sf per year to the cost of occupancy, says Vogel, adding that he thinks the product will be well received.

"When we deliver in 2010, I think the supply-demand fundamentals will be quite positive," he says. "By the time we have completed the buildings, I think we will have substantial preleasing in place. It's not a requirement, just an expectation given the projected strength of the market at that time."

Vogel declined to provide the total development cost for the project. Upon completion and stabilization, he estimates the combined value of the assets at $150 million.