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1/23/18
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An unnamed institutional investor paid $15.65 mil for a 109.7k sf ($143/sf), multi-tenant R&D building located in the South San Jose submarket of Silicon Valley. The property, located at 5830-5870 Hellyer Ave, was sold by DivcoWest Silicon Valley Investments.
Built in 1999, the property is just one mile north of the Highway 101/Highway 85 intersection, 1.6 miles from the Blossom Hill Caltrain station and a little over two miles from the Cottle Road VTA Light Rail station, offering ease of access throughout Silicon Valley. Additionally, the project is in proximity to several new residential developments across Highway 101 at the Cottle Transit Village, and less than two miles from the Village Oaks Shopping Center with over 20 retail and dining options including Panera Bread, Safeway, Target and FedEx Office.
Scott Prosser, Joe Moriarty and Jack DePuy of CBRE's Northern California Capital Markets team represented the seller in the transaction. According to Prosser, the property, which was 77% percent leased, gives the buyer immediate cash flow with upside potential through lease up of the market ready suite.
Tenants seeking alternatives from Northern submarkets due to the demolition of R&D buildings for new development and record-high lease rates have found South San Jose a compelling location, according to CBRE. As a result, companies have leased or purchased over 1 msf of space over the last 24 months, limiting supply for R&D space in South San Jose. This sale, along with the recent 2017 closings of two portfolios on nearby Optical Court, suggest that the appetite for properties in South San Jose will continue for institutional investors through 2018.
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