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SAN FRANCISCO-Shorenstein Properties LLC has acquired a $40-million stake in a portion of the construction financing for the Moffett Towers, a class A office development in Sunnyvale. The Shorenstein stake is a junior interest in a $66.8-million B-note included in a $216.8-million construction financing package provided earlier this year to Jay Paul Co. for construction of the Moffett Towers project.
Douglas Shorenstein, chairman and CEO of Shorenstein Properties, says that the company acquired the interest in the financing because it was attracted by the "strong risk-adjusted return on a financing instrument backed by a sponsor with an excellent track record for developing quality properties in Silicon Valley." He adds that the Silicon Valley suffer from "a dearth of large blocks of class A space," amid growing demand, particularly from the technology sector.
Shorenstein acquired the loan on behalf of its ninth investment fund, Shorenstein Realty Investors Nine LP, which is a $1.3-billion private commingled fund formed early this year. It is the second purchase made for the fund in recent weeks. Earlier this month, Shorenstein closed on the purchase of a $50-million mezzanine loan secured by the office portion of 660 Madison Ave. in New York City.
Upon completion, Moffett Towers will consist of three eight-story office buildings totaling 900,600 sf, plus two parking structures and surface parking with a ratio of 3.3 spaces per 1,000 sf of building area. The project is being developed on 23.2 acres within the planned 54-acre office campus that will eventually include 1.8 million sf of office space and a 40,000-sf fitness center as well as numerous other amenities.
The project, which marks the first speculative office development in the area since 2000, is being developed at the intersection of Highways 101 and 237. It is adjacent to light rail and public transportation that serves a large part of the Silicon Valley.
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