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Alien Technology HQ Trades Hands

MORGAN HILL, CA-The 81,235-sf corporate headquarters building is sold for $13.9 million. The RFID tag manufacturer has 8.5 years left on its lease.

By Brian K. Miller | Updated on November 16, 2004

MORGAN HILL, CA-The 81,235-sf headquarters of Alien Technology has changed hands. The sale price was $13.9 million. Alien Technology, a manufacturer of RFID tags, has 8.5 years left on its lease commitment at a triple-net rate of $1.29 per sf per month.The three-year-old facility is located at 18220 Butterfield Blvd., near the Cochrane Road exit from Highway 101. It contains about 30,000 sf of office space and 50,000 sf of R&D and manufacturing space. Alien Technology has invested nearly $9 million in tenant improvements to the building and has committed to leasing the building through July 2013, not including two six-year extension options.The names of the buyer and seller were not immediately available. The capitalization rate for the new owner is about 9.1%. The 10-year leveraged IRR is close to 20%, according to the offering memorandum.William Stuart and Scott Raymond, investment specialists in Marcus & Millichap’s Palo Alto and San Francisco offices, respectively, had the exclusive listing to market the property. “This asset captured the interest of investors across the country because of its long-term return on investment and the security of a well-capitalized tenant in a high-growth industry,” says Raymond. Alien Technology owns patents on key manufacturing processes for RFID tags, the eventual successor to barcodes and inventory tracking. As of 2004, the company has raised more than $150 million in venture capital to fuel the company’s expansion and prepare the company for full scale production.

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