Shorenstein Picks Up Mission Tower II for $70M

SANTA CLARA, CA-Shorenstein Co. is the new owner of WebEx Tower, the 283,135-sf class A office building here formerly known as Mission Tower II. The San Francisco-based private investment fund sponsor acquired the 12-story, 96% leased property for about $70 million, industry sources tell GlobeSt.com. The building, along with Mission Towers I, was developed in 1998 by WHTS Freedom Circle Partners LLC, a joint venture of Tishman Speyer, Travelers Real Estate Venture and Whitehall Street Real Estate Limited Partnership IX. In 2000, publicly traded PMC-Sierra signed a 10-year, $256-million lease in 2000 for 17 of 24 floors in the two buildings and moved its headquarters from Burnaby, BC. The company occupied a portion of Mission Towers I but ultimately never able to make use of the space in Mission Towers II. In July 2003, to get out from under the $215-million lease obligation, PMC-Sierra purchased the building and flipped it to a joint venture of San Francisco-based Westbrook Real Estate Partners and Palo Alto, CA-based Divco West’s Page Mill Properties Fund. The Westbrook-Page Mill JV paid about $33 million for the largely empty building; PMC-Sierra said it lost $102 million in the transaction.In April 2004, the Web conferencing company WebEx Communications Inc. made the building its world headquarters, signing a 10-year lease for 161,000 sf. The move earned it naming rights for the building, which is visible from Highway 101. The lease commenced in January. Other major tenants include Witness Systems and Silicon Valley National Bank.A Shorenstein representative declined to confirm the $70-million acquisition price from the Divco-Page Mill JV. WebEx Tower is Shorenstein’s first acquisition in Silicon Valley and the first acquisition for its seventh real estate investment fund. “We like the long term outlook for the Peninsula and Silicon Valley markets…,” says Shorenstein CEO Doug Shorenstein in a prepared statement.