The North San Jose property was sold to developer and fund manager Tishman Speyer. The site is entitled for 2.8 million sf of high-rise and mid-rise class A office as well as 100,000 sf of supporting retail. Tishman Speyer is looking to break ground this year en route to a phased opening beginning in early 2009.
The Downtown office tower was acquired from the Sobrato Foundation, a charitable foundation of Sobrato Development Cos., which developed the building and also owns BEA's existing headquarters. Sobrato has also begun marketing BEA's existing location "as is" for $2.75 per sf.
Phil Mahoney, Jay Phillips and Jay Belquist of Cornish & Carey Commercial/Oncor International represented BEA in both transactions. The transaction caused a decrease in the Downtown San Jose vacancy rate from nearly 19% to 12.7%, according to C&C.
A source at C&C tells GlobeSt.com that BEA entitled the site prior to a change in rules that now requires developers to an infrastructure fee to the city equal to $10 per sf that will be built. As a result, the site is grandfathered in and Tishman Speyer will not have to pay the fee prior to developing the property. Offsetting that missed income for the city is a $13-million parking revenue sharing agreement lease between BEA and the City of San Jose that will benefit the community and the city's Convention Center parking needs, according to C&C.
Frank Jesse, vice president of real estate for BEA says employees will benefit from the proximity to amenities and cultural events. Adobe Systems also keeps its headquarters in Downtown San Jose.
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