SANTA CLARA, CA-Lowe Enterprises and O’Conner Capital Partners have acquired two adjacent properties holding 114,000 sf of single-story tilt-wall flex buildings that they plan to raze and replace with one six-story, 215,000-sf class A office building. The partnership paid $20.5 million for the nine-acre property, which translates to $95 per sf it plans to develop.Los Angeles-based Lowe will lead the entitlement, planning and construction for the new development, which will have 36,000-sf floor plates. The site address is 3240-3250 Scott Blvd. The building will have freeway and signage visibility from Highway 101. The goal is to have the building be ready for occupancy in mid 2009.The partnership has engaged Korth Sunseri Hagey Architects and The Guzzardo Partnership to develop an initial site plan and conceptual design. CB Richard Ellis has been selected as the leasing broker for the property.Lowe and NYC-based O’Conner Capital acquired the properties from Deerfield Realty and Pace Properties. One of the buildings is vacant is encumbered by a lease that expires next year, which is when the partnership expects to have the necessary entitlements in place.The project is the third announced in the Silicon Valley in recent months that will replace older low-rise buildings. In September, California Bavarian Corp. of Palo Alto announced it has razed a two-building, single-story tilt-up campus in Sunnyvale and broken ground for Bordeaux Centre, a pair of three-story, 62,000-sf buildings that will replace them. The redevelopment site sits on the northeast corner of Mathilda Avenue and Bordeaux Drive, near the US 101-State Route 237 interchange. Yahoo, whose headquarters are located next door, leased the old campus right up until it was torn down 60 days ago. The new $40-million campus, called Bordeaux Centre, is slated to be ready for tenants in the third quarter of next year.

Nearby the Bordeaux Centre site, along Java Drive, a partnership of SCM Properties and Exterra Realty Partners is methodically tearing down a 20-year-old, single-story R&D campus and replacing with four- and five-story class A office buildings. The first phase of Java metro Center is a five-story, 150,000-sf building and a four-level parking garage. Completion is slated for this time next year.

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

Exterra principal Mike Parker, formerly a partner with Koll Development, told GlobeSt.com in August that there are some six million sf of requirements in play in the heart of the Silicon Valley. CPS Corfac International principal Steve Pace, one of the listing brokers for Exterra’s project, said current rates in the area are “about $3 per sf and escalating monthly as supply dwindles in step with the region’s expansion of high technology companies” such as Yahoo and Juniper Networks and Network Appliance.

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