New Palo Alto office building is bought by Chicago investor
PALO ALTO >> A new Palo Alto office building that’s already fully leased to a tech company has been bought by a big-time investor from Chicago, in one of the highest-priced property purchases in Silicon Valley since business shutdowns began nine months ago.
The building, which totals 85,400 square feet, is at the corner of Coyote Hill Road and Hillview Avenue in Stanford Research Park. Before even being completed, the property had landed a new tenant: VMware.
Harrison Street, a real estate investment firm, acting through an affiliate, bought the new office building, which was sold by Stanford University, according to Santa Clara County documents filed on Dec. 4.
HSR E C oyot e Hi l l Owner, the affiliate for Harrison Street, paid $123 million for the twostory office building at 3380 Coyote Hill Road, the property records show.
Stanford University, as is the institution’s custom for Stanford Research Park, retained ownership of the land beneath the building that was bought by Harrison Street.
The university provided Harrison Street with a ground lease for the land, according to the property documents.
Chicago-based Harrison Street landed a $69.5 million loan from Capital One National Association to finance the property purchase, the county records show.
Construction on the office building was expected to be complete before the end of this year, according to a brochure that was circulated by CBRE, a commercial real estate firm that has been marketing the property.
VMware preleased the office building even before it was completed. The lease was arranged by CBRE commercial real estate brokers Todd Husak, Damon Schor, and Mina Mohamadi.
“The site is carefully designed to preserve the connection with nature and offers a functional layout for a research or technology organization,” CBRE stated in the brochure. “Underground parking provides for more open space which enhances the surroundings and views.”
The transaction is a reminder that investors continue to hunger for choice sites in Silicon Valley and other parts of the Bay Area
Among the major purchases of Bay Area properties during the time of coronavirus-linked business shutdowns and eco
nomic uncertainty:
• $1 billion for the Genesis campus of two office towers, a smaller office building, and an amenities building in South San Francisco near Oyster Point.
• $650 million for the Transamerica Pyramid in San Francisco’s Financial District.
• $ 450 million for a mixed- use complex on Lakeside Drive in downtown Oakland that includes an office tower that will be the future headquarters for PG&E.
• $ 346 million for a 10- building office campus on Results Way in Cupertino, a complex that is leased to tech titan Apple.
• $275 million for two office buildings, an amenities building, and a parking garage in north San Jose’s Coleman Highline mixeduse complex on Coleman Avenue near the city’s international airport.
Palo Alto and Stanford Research Park have drawn plenty of interest from buyers this year.
Alexandria Real Estate, a big investor from Southern California, has been one of the busiest buyers of properties in Palo Alto.
Pasadena- based Alexandria, in three years, has paid $855 million for office and research buildings in Palo Alto.
In August, Alexandria paid $115.2 million for an office building totaling 100,000 square feet at 3180 Porter Drive, which is in Stanford Research Park.