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CarrAmerica Buys Five Buildings in Office Park

NORTH SAN JOSE, CA-The Washington, DC-based REIT pays $43.8 million for 331,950 sf in Corporate Technology Centre, giving it seven of the eight buildings that comprise the 604,870-sf office/R&D development.

By Brian K. Miller | Updated on September 29, 2004

NORTH SAN JOSE, CA-CarrAmerica Realty Corp. has added to its holdings at Corporate Technology Centre, an eight-building, 604,870-sf office/R&D development here. The Washington, DC-based REIT paid $43.8 million for 331,950 sf in five buildings, and now owns seven of the buildings for a total of 508,230 sf.The buildings were acquired from the developer of the park, a 50-50 joint venture of Menlo Equities and affiliates with iStar Financial Inc. The duo acquired the land (33 acres) for the overall development in 1998. Developed and leased in two phases in 1999 and 2000, the project includes four three-story buildings, three two-story buildings and one single-story building ranging in size from 19,550 sf to 99,870 sf. The site has 1/2 mile of frontage along Highway 237 between Zanker Road and North First Street. CarrAmerica’s newly acquired buildings are a combined 42% leased. The purchase price translates to $132.03 per sf, which CarrAmerica’s Northern California managing director Christopher Peatross describes as “a significant discount to replacement cost.” The other two buildings CarrAmerica owns in the park were purchased in July and are 100% leased.CarrAmerica expects its five-building acquisition to provide a year one GAAP return of 3.7% and a stabilized GAAP return of approximately 11%. In the San Francisco Bay Area, CarrAmerica now owns, directly or through joint ventures, interests in 89 office and R&D buildings containing approximately 6.3 million sf.

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