New Owners Finance Hellyer Oaks Tech Park

SAN JOSE, CA-The new owners of Hellyer Oaks Technology Center have closed on $18.3 million in financing secured by the 353,174-sf office/R&D park. Guggenheim Real Estate PLUS and Professors Capital Funds paid about $35 million cash for the two-building complex, which is 92% leased but much less occupied.Allstate Investments provided the financing. The five-year loan has a fixed interest rate of 4.95%. It was sourced by the Paul Brindley, senior managing director of Holiday Fenoglio Fowler in Los Angeles.The two-story buildings are located at 5215 and 5225 Hellyer Ave., in the southeastern portion of Silicon Valley. On-site amenities include a cafeteria, gymnasium, picnic area and sand volleyball court, as well as parking for 1,377 cars.Major tenants in the building include New Focus Inc. (130,000 sf) and Northrup Grumman Corp. (115,000 sf). New Focus, however, does not inhabit its space, the lease for which runs deep into 2007, and Northrup Grumman’s lease expires in three years. Both leases carry above-market rents.”The dark space presented a challenge in arranging this financing, [but] the strong sponsorship and cash equity mitigated those concerns,” Brindley says. “They could have gotten [a larger financing], but it would have been significantly more expensive with that asset in that market.”Guggenheim Real Estate PLUS is an open-end diversified real estate portfolio managed by Guggenheim Real Estate LLC. Professors Capital Funds is a privately held investment company that owns and manages a portfolio of multifamily, office, flex, retail and land investments in Arizona, Connecticut and Southern California.The duo acquired Hellyer Oaks under the name Golden Gate Real Estate. At the time of the acquisition, Golden Gate principal Bob Emri said he is bullish on the recovery in the Silicon Valley. “The Bay Area has been, and will continue to be, one of the elite epicenters of the US economy and we…have found a great asset…at a valuation that provides for significant upside,” he said. “We believe the story here and we are actively looking to acquire more assets in the Bay Area.”