Palo Alto office shopping spree reaches $700 million for realty investor

PALO ALTO >> A big real estate firm has expanded its shopping spree for Palo Alto office buildings to a headspinning $700 million with a fresh set of property purchases totaling nearly $76 million in the Silicon Valley tech hub.

Alexandria Real Estate Equities has scooped up multiple buildings on Hillview Avenue in Palo Alto, extending a string of property purchases in the South Bay city that began about two years ago, according to Santa Clara County public records that were filed on Feb. 5.

Including the just-completed purchases, Alexandria Real Estate has spent a jaw-dropping $700 million on Palo Alto properties in a buying binge that was initiated in January 2018, county documents and estimates from property experts show.

Pasadena-based Alexandria Real Estate paid $75.9 million for the office buildings, which are located on Hillview Avenue.

Alexandria paid $56.1 million for an office building at 3412 Hillview Ave. that’s leased to tech firm SAP and plunked down $19.8 million for a building at 3330 Hillview Ave. whose tenant is Kirkland & Ellis, a tech-oriented law firm.

The string of Palo Alto property purchases for Alexandria began at the outset of 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, 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. Google owns properties near the SSL site that Alexandria bought in late 2019.

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.

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.

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.