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11/24/15
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Castro Commons, a two building, 42.7k sf office complex in Mountain View, was acquired by a Peninsula Land & Capital-owned entity. The purchase was financed with a $14.2 mil non-recourse loan.
Located at 1172 and 1174 Castro Street, the two-building, two-story office complex is adjacent to the Downtown/Castro Street core, one of the most highly sought after and dynamic submarkets in Silicon Valley with numerous dining, shopping, working, and living options. Castro Commons is within walking distance to the heart of downtown and in proximity to the CalTrain station.
The property, which contains an underground parking garage, is currently 96% leased to nine tenants. Built in 1993, the buildings have a strong historical occupancy and are part of a limited supply of high-quality office and medical/dental suites in the area.
Michael Walker and Brad Zampa of CBRE’s San Francisco office arranged the 10-year, fixed-rate financing. The loan represented 70% of the purchase price and was funded by Guggenheim Commercial Real Estate Finance, LLC.
Commenting on the transaction, Walker noted, “Life company lenders are often times hesitant to finance real estate encumbered by a ground lease. We were successful in finding the outlier balance sheet execution that represents 70% leverage at a very compelling interest rate and is fixed-rate for 10 years.”
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