Yahoo! closed on 42.5 acres late last week and expects to close on the remainder in the next few weeks. The property holds some 600,000 sf of single-story R&D-type buildings. Some of the early reports this week suggested the price of the property was in the $50-million range, but a reliable source tells GlobeSt.com the total price tag "is double that amount."
Michael Covarrubias, the chief executive of the seller, San Francisco-based TMG Partners, declined to confirm the price but tells GlobeSt.com that the Internet company's plans are to eventually raze the buildings and replace them with approximately 2.5 million sf of class A office space in multiple mid-rise buildings.
The property is located between Old Ironsides Drive and Patrick Henry Drive off of Tasman Boulevard, next to a light rail station. TMG assembled the contiguous acreage in multiple transactions over the past five years.
"We acquired a 40-acre, 600,000-sf campus from Siemens in 2000-2001 and nearly turned around and sold it all to Exodus, a giant Internet database company, but they only closed on the half before going bankrupt," Covarrubias says. "That left us with 300,000 sf of 20 acres at a pretty negligible cost basis, so we decided to hold and see how things went; as the cycle hit bottom we started to realize we could acquire other properties and create a larger assemblage."
Covarrubias says it will take three to four years to get the campus up and running. "We will work with [Yahoo] on the entitlement side and hopefully more," he says, referring to the possibility of handling the development side of things as well.
Yahoo! reportedly evaluated over 50 Bay Area sites from San Francisco to San Jose. One of the factors in the decision was proximity to its headquarters in Sunnyvale. Yahoo! currently controls 1.7 million sf of owned and leased space in Sunnyvale and Santa Clara.
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