Alexandria’s Palo Alto deals top $800M

A veteran developer from Southern California has bought a big Palo Alto office building from Stanford University, sending the realty investor’s dramatic shopping spree for Palo Alto properties well over $800 million, even in the face of the economic uncertainties unleashed by the coronavirus.

In the most recent deal, completed in early August, an affiliate of Alexandria Real Estate Equities bought an office building at 3180 Porter Drive in the prestigious Stanford Research

Park in Palo Alto, Santa Clara County public documents show.

The 3180 Porter office building totals 100,000 square feet, according to a web page on the Stanford Research Park site. Jazz Pharmaceuticals is the tenant in the building, the Stanford page shows.

Stanford University, the seller of the property, sold only the office building. The university, as is its custom for Stanford Research Park, retained the ownership of the land beneath the building.

Pasadena-based Alexandria Real Estate has now spent about $815 million to buy properties in Palo Alto during the roughly two-and-a-half years since the company began to grab parcels in the Silicon Valley city in January 2018, according to county documents and this news organization’s research.

ARE San Francisco No. 85, the Alexandria Real Estate affiliate, paid $115.2 million for the 3180 Porter office building, according to county property documents that were filed on Aug. 7. Public business records show the affiliate is controlled by Alexandria.

Alexandria’s expertise includes the development of office and laboratory space for life sciences and technology

companies. That’s the sort of space Alexandria has developed along the San Francisco waterfront near Chase Center and the Oracle baseball park, replacing aging structures with sleek new buildings.

The first of the Alexandria purchases in Palo Alto

occurred in January 2018, when the company paid $136 million for the Embarcadero Place office complex on Geng Road.

About a year later, in January 2019, Alexandria paid $100.3 million for an office building at 3170 Porter Drive that’s leased to Jazz Pharmaceuticals. Then in August 2019, Alexandra paid $97 million for an office building leased to Stanford Health next door at

3160 Porter.

In December 2019, Alexandria paid $291 million for a vast property that contains several aging buildings whose occupant and owner for decades has been SSL and its predecessor, Space Systems Loral, a famed defense contractor. These buildings are at 3825 and 3875 Fabian Way. Google owns properties near the SSL site that Alexandria bought in late 2019.

In February 2020, Alexandria paid $75.9 million for Palo Alto office buildings with addresses of 3412 and 3330 Hillview Ave.

It’s entirely possible that Alexandria Real Estate might choose to bulldoze the decades-old research and office buildings on the Loral site and replace them with a modern office park.

Palo Alto is deemed to be one of the most desirable locations for tech and life sciences

companies and is one of the original hubs for Silicon Valley.

The deal also shows that savvy investors still hunger for Silicon Valley real estate, even during a time when the coronavirus has created a murky picture regarding the attitudes that tenants might have towards their need for office space.