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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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
