NYC investor grabs north San Jose tech hub
Big profit for sellers as buildings fetch $535 million
SAN JOSE >> An East Coast private equity firm has bought a landmark tech hub in north San Jose for more than a half-billion dollars, a mega-deal that underscores how real estate investors are pouring money into Silicon Valley.
HQ @ First, a San Jose tech complex with three office towers next to Highway 237 near North First Street, has been bought by an affiliate of KKR, a worldwide investment firm, in a deal that produced a hefty profit for the seller.
KKR paid $535 million for the office complex, which has addresses of 110, 120, and 130 Holger Way, as well as a big parking garage at 95 Headquarters Drive that is next to the offices, according to documents filed on July 30 at the Santa Clara County Recorder’s Office.
Newmark, a commercial real estate firm, arranged the property purchase. The brokers who handled the deal were Steven Golubchik, Edmund Najera, Jonathan Schaefler, and Darren Hollak.
“HQ @ First is one of Silicon Valley’s most iconic campuses,” Newmark said in 2017 in describing the tech center.
New York City-based KKR obtained a $408 million loan from JPMorgan Chase at the time of the purchase, the county documents show.
“HQ @ First is a marquee property with great amenities, including onsite lab facilities, and access to Silicon Valley’s immense pool of talent,” said Justin Pattner, a KKR partner and head of one of the company’s real estate units.
In 2019, Mori Trust, a Japan-based developer and real estate investor, paid $429 million for the property, whose office buildings total a combined 561,500 square feet.
The $535 million price KKR paid a few days ago was 24.7% higher than what Mori Trust paid in 2019.
Micron Technology, a
semiconductor company, and Zscaler, a cloud-based security services firm, are the tenants in the office hub. San Francisco-based Drawbridge Realty will be the local manager of the office complex for owner KKR.
Plenty of amenities are available next to the justbought campus.
A retail center whose occupants include Target, shops, and restaurants is adjacent to the HQ @First offices.
A number of on-site amenities also are featured within the tech campus.
“Landscaped paths, natural light, views of the Bay and hills, outdoor BBQ and patio areas, basketball court, top-of-the-line fitness center and locker rooms, a game room, an expansive executive business center, and a 300-plus seat cafeteria” are among the onesite features in the tech hub, Newmark stated.
The acquisition suggests Silicon Valley properties can be choice long-term investments, in KKR’s view.
“Well-located, trophy assets that can deliver a dynamic work environment for innovative growth companies will have significant staying power and long-term value,” Pattner said.