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FREMONT, CA-A 16-building 1.02-million-sf R&D/office portfolio within the Bayside Technology Park here has changed hands. Renco Properties of Sunnyvale sold the portfolio to a joint venture of TMG Partners of San Francisco and MacLean, VA-based JER Partners.

Built mostly in the 1980s, the portfolio is 60% occupied. The purchase price came in between $120 per sf and $130 per sf, according to local industry sources. At $125 per sf, the purchase price would be about $128 million.

Barclays Capital provided acquisition financing for the transaction. TMG Partners will manage the portfolio, which according to local sources say is projected to produce $9 million in net operating income for the new owner.

TMG Partners chief executive Michael Covarrubias tells GlobeSt.com that the plan is to flip the fully leased buildings to investors in order to lower its cost basis and then lease up and sell off the remainder. The pro forma hold is three- to five years, he says, but things likely will happen more quickly than that.

The 143-million-sf Silicon Valley R&D market saw overall vacancy fall to 21.4% in the second quarter of the year on close to 500,000 sf of net absorption, according to Cornish & Carey Commercial, which brokered the transaction. Direct vacancy now stands at 16.4%, according to the report.

“The Park is an attractive office and R&D asset in a stable area of the South Bay,” says Cia Buckley, JER’s senior managing director for North American investments. “We recognize both the opportunity to add value to the property, as well as to enjoy the demand for this type of space as the region continues to improve.”

JER Partners is the private equity investment arm of J.E. Robert Cos., a real estate investment management company. TMG Partners is a full service real estate development and management company.

A lot of Silicon Valley R&D space has been changing hands lately. Earlier this month, FirstCal, the $950-million joint venture of publicly held First Industrial Realty Trust of Chicago and the California State Teachers Retirement System, acquired 737,000 sf of R&D space in 11 buildings in four developments in the Santa Clara County cities of San Jose, Sunnyvale and Milpitas. The purchase price for the 75% leased portfolio was $85.5 million or $116 per sf, according to local industry sources.

In August, Burlingame-based Four Corners Properties LLC acquired a 301,593-sf office/R&D portfolio in Santa Clara and Sunnyvale from Equity Office Properties. The buildings are approximately 50% leased. The acquisition price was not available. In July, EOP sold a 301,593-sf 14-building office/R&D portfolio in Santa Clara and Sunnyvale to Westcore Properties. The buildings were 85% leased. The sale price was $144 per sf.

In April, Westcore acquired a 23-building, 613,358-sf R&D, light industrial and office portfolio in the cities of San Jose, Santa Clara, Sunnyvale and Fremont. The portfolio was 98% leased. The sale price was $78.6 million or $128 per sf.

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