NORTH SAN JOSE—Long-term leases, strong cash yield, potential re-tenanting opportunity, discount to replacement cost and excellent market fundamentals are what sets a property apart from others in the competitive Silicon Valley market. This is what made the Ridder Park Technology Center an appealing investment target.
It is so appealing, in fact, that the 238,342-square-foot creative office/R&D campus has been acquired for $51.5 million. The buyers are a joint venture partnership between Graymark Capital Inc. and New York Life Real Estate Investors. The seller was undisclosed.
The institutional-quality property is 89% leased to two tenants on long-term leases. A majority of the space was recently renovated to creative office with modern lab facilities built with upwards of $100 per square foot invested in the space. The asset was constructed in 1992 and is improved with creative office interiors and outdoor amenities.
"This acquisition continues our program of making smart investments in infill locations that exhibit strong employment and demographic trends," says Graymark CEO Brian Hecktman. "We are also excited to enter into our first transaction with New York Life Investors, a strong institutional equity partner for us as we continue to grow our platform."
Located in the North San Jose submarket off of Highway 880 at Brokaw, the property provides a convenient location to both South Bay and East Bay employees with excellent freeway visibility. The campus is in a mature setting with walkability to retail amenities in the North San Jose submarket.
Graymark managing director and CFO Jeff Hoppen tells GlobeSt.com: "This is Graymark's eighth investment in Silicon Valley in the past few years and we continue to be very bullish on the market. We are very happy with our investment basis and tenant roster, and this acquisition allows us to benefit from significant tenant demand in North San Jose as high-quality space has become hard to find in markets like Mountain View, Sunnyvale and Cupertino."
Debt financing on the acquisition was provided by the San Francisco office of Wells Fargo Bank. The property was purchased through the Silicon Valley office of Eastdil Secured led by managing director Greg Cioth.
Graymark Capital is a real estate investment firm founded by Hecktman, Hoppen and vice president of acquisitions, Rick Lafranchi.
As previously reported, another North San Jose office property was acquired in late summer.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
