20-Building Westport Office Park Trades for $236M

REDWOOD CITY, CA-The 20-building Westport Office Park has changed hands for $236.5 million, according to the new owner. The developer, Peery Arrillaga, sold the 967,680-sf office to a joint venture of Prudential Real Estate Investors and Emeryville-based Harvest Properties.

Completed in 2001, the park is comprised of 20 two-story, 48,000-sf steel buildings built atop a former municipal landfill. The campus-style project was designed for R&D, high-technology companies, computers manufacturing and biotech industrial tenants. Occupancy is about 65%. Oracle, the park’s largest tenant, leases two of the buildings. The going triple-net rental rate there is about $2.25 per sf per month.

Robert Gilley, Steve Hermann and Erik Doyle with CBRE’s Institutional Group had the disposition assignment. PREI’s San Francisco-based VP Tim Hennessey handled the acquisition. Neither Gilley nor PREI’s Tim Hennessey could be reached Tuesday for comment, but another PREI source provided the purchase price. Executives from Harvest Properties and Peery Arrillaga also were unavailable for comment. Slough Estates tied up the property back in December for about $228 million but eventually walked away, according to published reports.

“The acquisition of Westport Office Park marks one of PREI’s largest investments to date in an office market that has been negatively impacted by significant job losses in the technology sector over the past four years,” says Hennessey in a prepared statement. “Given the quality of design and construction of this campus, the asset is well positioned to capture its fair share of new tenant demand as the market continues to improve. We will look to Harvest Properties, our operating partner, to execute on the repositioning this asset over the next several quarters.”

Westport cost more than $150 million to develop, according to published reports. It is considered to be one of the most ambitious, technically-challenging redevelopment projects ever undertaken on a former landfill site. Most of the 85-acre property was used as a municipal waste landfill from the 1940s until 1970.