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IBM Takes 125,000 SF in Former Cisco Building

SAN JOSE, CA-The 188,000-sf office building, 4400 North First St., is one of three vacant buildings that a joint venture of Divco West's Page Mill Property Fund and CalSTRS acquired from Cisco Systems at the start of the year for about $52 million.

By Brian K. Miller | Updated on October 18, 2005

SAN JOSE, CA-IBM has executed a 125,000-sf lease for a vacant 188,000-sf office building here that is owned by a joint venture of Divco West’s Page Mill Property Fund and CalSTRS. The lease commitment at 4400 North First St. is believed to be more than 10 years, though parties involved in the transaction would only describe it as “long-term.”

Last month, IBM announced plans to relocate 1,150 workers from its Cottle Road campus in south San Jose, which is being redeveloped. As part of that announcement, it said 700 workers were expected to land in a North San Jose building it did not identify. That building is 4400 North First St., industry sources tell GlobeSt.com.

The building leased by IBM was part of a vacant three-building portfolio totaling 453,700 sf that Cisco Systems sold to the Page Mill-CalSTRS joint venture in an off-market, estimated $52-million transaction that closed in January. In addition to $27.4 million in acquisition financing, the JV took out a $31.2-million loan to fund capital costs necessary to lease up the buildings, according to the lender, Gramercy Capital Corp. The cross-collateralized financing matures in 24 months, has three one-year extension options and bears interest at a rate of Libor plus 300 basis points, according to Gramercy.

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