Silicon Valley Remains at the Top of Investors’ Lists
The profile of Silicon Valley has changed dramatically in the last 15 years with the growth and presence of the largest tech tenants and 350 Holger Way, a 96,502-square-foot class-A office building, is counted as one of its desirable assets.
SAN JOSE—Silicon Valley was named the tech market that is most resilient and poised for future growth, according to a recent CBRE report. With its office market dominated by large-cap tech firms, Silicon Valley had the fourth-greatest office rent growth and the sixth-greatest office net absorption as of the fourth quarter of last year.
With that top billing in mind, investors are continuing to gravitate to the Valley and Thor Equities is no exception. Thor secured $31 million in financing for 350 Holger Way, a 96,502-square-foot class-A office building. The CBRE capital markets’ debt and structured finance team led by Brad Zampa and Mike Walker arranged the fixed-rate financing on behalf of the borrower.
Wells Fargo provided a 10-year full-term interest-only loan and a competitive interest rate. Joe Moriarty, Russell Ingrum, Scott Prosser and Jack Depuy of CBRE represented the seller in the transaction that closed at year-end.
“The profile of Silicon Valley has changed dramatically over the last 15 years with the growth and presence of the world’s largest tech tenants,” Prosser, CBRE executive vice president, tells GlobeSt.com. “It has created a much more stabilized marketplace with an enhanced credit profile of the overall tenancy. With the predicted continued growth in the tech markets and the overall resiliency of the Silicon Valley during the pandemic, the Silicon Valley remains at the top of the list for commercial real estate investment capital.”
Built in 1999, the three-story steel-frame building features extensive glass lines and efficient floor plates. The building’s roof and HVAC were replaced in 2018. The property was completely renovated in 2019, including new interiors, an outdoor amenity area, and upgraded exteriors, landscaping and parking lot. The property is 100% leased to an investment-grade tenant through 2027.
“The appetite from both lenders and investors for high-quality stabilized assets is extremely robust,” said Zampa, CBRE executive vice president. “350 Holger checked all the boxes and it is no surprise we had double-digit bids from life companies, bank balance sheets and CMBS providers.”
Additionally, the property features building-top signage opportunities with visibility from Highway 237, which averages 268,000 cars daily. The property is located within a mile of Highway 237 and Interstate 880, and within two miles of Highway 237 and Highway 101, providing access to the Silicon Valley and Greater Bay Area. The property is in the Golden Triangle, which incorporates parts of North San Jose, Santa Clara, Sunnyvale and Milpitas, and is a preferred office location for technology firms.
“Silicon Valley is appealing to investors and office tenants because it is the global capital of technology, which is the leading driver in the economy,” Moriarty, CBRE executive vice president, tells GlobeSt.com. “Silicon Valley has an extremely deep pool of engineering talent as well as an unequaled ecosystem supporting the development and growth of technology-oriented companies. Silicon Valley is the headquarters of many leading technology companies as well as hundreds of other technology companies ranging from startups to corporate giants.”