Prominently situated alongside Highway 101, adjacent to Intel's world headquarters, the building is currently 65% occupied by 39 different tenants. The seller, Miami-based Lennar Partners, took ownership of the property after a lengthy foreclosure process. The acquisition includes two adjacent parcels, a six-acre parking parcel and a one-acre development parcel.
Silicon Valley entrepreneur Sunil Suri lost the building to Lennar, the lender, in mid-2004. Suri had acquired the building just before the turn of the century and as tenant demand fell along with the dot-com industry, he apparently couldn't meet obligations related to the building's securitized mortgage.
With the building out of foreclosure and the financial distress resolved, PCCP's business plan calls for an aggressive repositioning of the asset to achieve market occupancy. The reposition strategy will focus on adding value through more targeted marketing efforts, efficient space plans and a capital investment strategy. A PCCP executive could not be reached Monday for additional detail.
"The exceptional location of the asset in one of the premier settings of the Silicon Valley--along with the low office vacancy rate in the direct competition--make this an outstanding investment opportunity," says PCCP managing director Bryan Thornton in a prepared statement. "Additionally, the one-acre development site provides an upside opportunity in the future."
Thornton expressed confidence in the Santa Clara office submarket, noting that upward of 50 new leases have been signed in the last 12 months in Santa Clara multi-tenant office properties, resulting in a net positive absorption of approximately 832,895 sf.
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