Built in the early 1970s at Page Mill Road and Hanover Street, Page Mill Center is fully leased to seven tenants. The anchor tenants, Stanford University Hospital and Lucille Packard Children's Hospital, lease approximately 100,000 sf for administrative functions. The purchase price is in line with triple-net market rents at the park, which average $45 per sf, Wenger tells GlobeSt.com.
Stanford University owns all the land within the 10-million-sf park. EOP acquired Page Mill Center and the associated ground lease from Minnesota-based Eagle Ridge Partners LLC, which acquired the development 10 years ago for approximately $22 million. Other than to describe it as "long term," Wenger declined to reveal the length of the ground lease, citing a confidentiality agreement with the university.
Leases for about 15% of Page Mill Center roll in 2007 and another 24% rolls in 2008. Wenger says that's a positive because office vacancy in the park is low and the tenants whose leases are rolling are paying below-market rents.
With Page Mill Center, EOP now owns more than one million sf within Stanford Research Park, most of it pure office space, which Wenger says Stanford University limits to 25% of the park's space. That constraint on supply is one of the reasons EOP has been increasing its office holdings in the park, she says.
EOP's other pure office holdings in the park are Palo Alto Square, which totals 330,000 sf, and the Clock Tower, a 97,000-sf development that EOP picked up in late 2005 for about $425 per sf. The combined occupancy of those two properties is about 92%, Wenger says.
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