Seattle-based Washington Holdings, a commercial property investor with offices in Santa Clara, acquired the six-building North First Street Corporate Center in San Jose located on Daggett Drive between North First Street and Zanker Road for $60 million, or approximately $240 per square foot, according to the buyer. The property, which is nearly 250,000 square feet, is just shy of 90 percent occupied.
The seller of the complex was Boston-based TA Associates, which had owned the buildings since September of 2014, when they bought them from PCCP for $48,850,000, or approximately $195 per square foot, according to public records.
With this purchase, Washington Holdings owns approximately one million square feet across 26 buildings in Silicon Valley said Casey Holt, vice president and general manager of Washington Holdings in Santa Clara. The company plans an extensive renovation of the buildings, similar to the repositioning efforts the company did at its Mission Park asset. “We have a similar plan like we did with with Mission Park at Zanker Road. Total repositioning of the asset, we’ll make upgrades to the entries and the overall project,” said Holt.
The company has engaged the San Jose-based Studio G Architects and is working on the designs with the firm already. Studio G has made a name for itself in repositioning commercial properties across Silicon Valley, and aside from working with Washington Holdings on this and their pervious project, they also worked with the Bixby Land Company on their 288,000 square foot The Campus in San Jose, the Lane Partners redevelopment of Orchard Commons, a 313,000 square foot property in San Jose, as well as the Divco West’s Divco Trimble, a 206,000 square foot complex also in San Jose, amongst others.
Hold stated that the company is looking to start redevelopment construction in the first quarter of 2018, with an expected completion date sometime in the third quarter of 2018.
Some of the tenants in the property are NeoPhotonics, a New York Stock Exchange listed company that develops, manufactures and sells optoelectronic products that transmit, receive and switch high speed digital optical signals for communications networks. Others include Bruker Nano, a manufacturer of electron microscope analyzers and Zebra Technologies, whose R&D hub is at this property.
Holt stated that once completed the project will cater to similarly sized tenants. “We have a handful of leases that roll over the next few years, so this is definitely a value-add deal for us. Similar to what is there, the goal as a portfolio is to accommodate 10,000 to 50,000 square foot R&D user, similar to what we’ve done at Zanker [Rd. location,]” he added.