SANTA CLARA, CA-Lowe Enterprises and O'Conner Capital Partnershave acquired two adjacent properties holding 114,000 sf ofsingle-story tilt-wall flex buildings that they plan to raze andreplace with one six-story, 215,000-sf class A office building. Thepartnership paid $20.5 million for the nine-acre property, whichtranslates to $95 per sf it plans to develop.Los Angeles-based Lowewill lead the entitlement, planning and construction for the newdevelopment, which will have 36,000-sf floor plates. The siteaddress is 3240-3250 Scott Blvd. The building will have freeway andsignage visibility from Highway 101. The goal is to have thebuilding be ready for occupancy in mid 2009.The partnership hasengaged Korth Sunseri Hagey Architects and The Guzzardo Partnershipto develop an initial site plan and conceptual design. CB RichardEllis has been selected as the leasing broker for the property.Loweand NYC-based O'Conner Capital acquired the properties fromDeerfield Realty and Pace Properties. One of the buildings isvacant is encumbered by a lease that expires next year, which iswhen the partnership expects to have the necessary entitlements inplace.The project is the third announced in the Silicon Valley inrecent months that will replace older low-rise buildings. InSeptember, California Bavarian Corp. of Palo Alto announced it hasrazed a two-building, single-story tilt-up campus in Sunnyvale andbroken ground for Bordeaux Centre, a pair of three-story, 62,000-sfbuildings that will replace them. The redevelopment site sits onthe northeast corner of Mathilda Avenue and Bordeaux Drive, nearthe US 101-State Route 237 interchange. Yahoo, whose headquartersare located next door, leased the old campus right up until it wastorn down 60 days ago. The new $40-million campus, called BordeauxCentre, is slated to be ready for tenants in the third quarter ofnext year.

Nearby the Bordeaux Centre site, along Java Drive, a partnershipof SCM Properties and Exterra Realty Partners is methodicallytearing down a 20-year-old, single-story R&D campus andreplacing with four- and five-story class A office buildings. Thefirst phase of Java metro Center is a five-story, 150,000-sfbuilding and a four-level parking garage. Completion is slated forthis time next year.

The Sunnyvale projects are in response to that city's plan forincreased density around the VTA light rail line. Generally,though, all; three projects are in response to increased demand formid-rise class A office in a region currently dominated by low-riseindustrial-style R&D buildings.