SUNNYVALE, CA-DivcoWest confirmed it has completed the purchase of 1252 and 1310 Orleans Dr.—two, single-story, office/R&D buildings totaling 100,000 square feet in Sunnyvale, CA. The seller was Orchard Partners and AEW Capital Management.
The property is 100% leased on a triple net basis to two tenants, Bloom Energy and Accuray Inc. Accuray is headquartered at Chesapeake Commons, also owned by DivcoWest. Financial terms of this transaction were not disclosed.
CBRE's Joe Moriarty & Tyler Meyerdirk marketed this transaction while Randy Single of Greenberg Traurig LLP provided legal counsel.
According to Moriarty, “We are continuing to see increased interest in properties like Orleans Business Park that have strong tenant profiles and offer investors an opportunity to acquire a high-quality asset in a surging submarket such as Sunnyvale. Sunnyvale continues to experience single digit vacancy rates and remains a true hot bed for high-tech innovation and development, making it one of the premier investment regions in the country.”
Blocks of 100,000 square feet and higher in the area—at least for office product—is hard to come by and is in high demand in Sunnyvale and nearby cities like Palo Alto and Mountain View.
As GlobeSt.com previously reported, “New developments will offer some supply relief, but at a premium relative to overall market rents,” explained Conor Flannery, EVP, Jones Lang LaSalle, who recently chatted with GlobeSt.com on the subject. North San Jose “offers the most choices for tenants, but because much of the space is second generation R&D product, many of the buildings need upgrades.”
Divcowest has been busy lately. As GlobeSt.com previously reported, DivcoWest recently worked in a partnership with TPG and Ivanhoe Cambridge on Ivanhoe's $400-million acquisition of 73 Silicon Valley office buildings in the San Francisco area. “TPG and DivcoWest plan to help increase the value of those office and R&D properties through additional investments and through strong asset management committed to meeting tenant needs,” said Ivanho-Cambridge's president, global investments, Bill Tresham.
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