Palo Alto Technology Complex Land Acquirer
PALO ALTO — A seasoned Palo Alto real estate company’s real estate buying spree has now topped $1 billion with the company’s latest purchase of a prime office campus in the South Bay tech hub, according to reports. public records.
Alexandria Real Estate, acting through an affiliate, has purchased a four-building office complex on Hillview Avenue in Palo Alto, documents filed Jan. 6 with the County Recorder’s Office show Santa Clara.
The subsidiary, ARE San Francisco No. 97, paid $446 million for offices and a ground lease for the land under the quartet of buildings, which have addresses from 3301 to 3307 Hillview Ave., according to property files from the county.
The four buildings total approximately 292,000 square feet, according to a brochure released by CBRE, a commercial real estate company that markets the property.
Pasadena-based Alexandria Real Estate purchased the buildings, located in the prestigious Stanford Research Park neighborhood, in an all-cash transaction.
As is customary for real estate transactions in the research park, Stanford University retained ownership of the land beneath the four buildings and Alexandria Real Estate purchased a ground lease for the technology campus.
County documents said Alexandria paid $267.6 million for the buildings and $178.4 million for the ground lease, bringing the total value of the deal to $446 million.
With the most recent transaction, including land lease value, Alexandria spent at least $1.37 billion buying properties in Palo Alto over a four-year period that began in January 2018.
Palo Alto is one of the strongest office markets in the Bay Area, primarily because the city is a major tech hub and has low vacancy rates, real estate experts say.
The office complex that Alexandria purchased, however, is not occupied, although it is leased, according to the CBRE brochure. The entire complex is available for subletting, CBRE said in the brochure. The existing lease extends through March 2027, CBRE said.
Pasadena-based Alexandria is considering an overhaul of the four office buildings to take advantage of the current surge in rentals by life science, medical device and biotech companies, according to a Jan. 4 filing by the company with of the Securities and Exchange Commission.
“We plan to redevelop these spaces into offices and labs,” Alexandria said in the SEC filings.