CBRE Global Investors likes buying buildings in one part of Sunnyvale: Moffett Park.
by Nathan Donato-Weinstein –
Continuing an acquisition spree in Sunnyvale’s Moffett Park business district, CBRE Global Investors has paid more than $130 million in recent weeks to pick up a string of buildings, bringing the investment manager’s total spend in the submarket to more than half a billion dollars so far this year.
CBRE Global Investors’ investment in the area has been the talk of the commercial real estate world since the company began assembling a massive portfolio in Sunnyvale back in January. As I’ve written about several times, there is widespread consensus among market observers that the company is acting on behalf of Google, though such reports remain unconfirmed. The recent deals show that CBRE remains in buying mode, despite already acquiring more than 1.5 million square feet of space in the 1,100-acre area.
In the most recent deal, an affiliate of CBRE Global Investors bought seven buildings from San Francisco-based Prologis that add up to 263,500 square feet of building area, according to deeds that I examined on Friday at the Santa Clara County Clerk-Recorder’s office. They include four buildings at 1330 Bordeaux Ave. totaling 135,300 square feet; two buildings at 225 Humboldt Ct. totaling 71,400 square feet and one building at 1320 Bordeaux Ave. totaling 56,800 square feet. Public records show CBRE paid $116.6 million for these properties, or about $442 per square foot.
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That number would make it among the richest sales during CBRE’s buying binge, especially when you consider that these buildings are essentially warehouses. I reached out to both Prologis and CBRE Global Investors to verify my numbers. CBRE declined; Prologis did not get back to me.
In a separate deal that closed earlier this month, CBRE paid about $14 million, or $350 per square foot, for 1185 Bordeaux Ave., a 40,000-square-foot building that backs up to the old Juniper campus which Google leased this summer. The seller was OD Equities LLC.
Investor interest in Moffett Park isn’t out of the ordinary. While Google is growing rapidly in the area, Moffett Park is also home to corporate citizens like Yahoo Inc., NetApp and Amazon’s Lab126. Jay Paul Co. is also building two huge new office projects on spec— the nearly 2-million-square-foot Moffett Place, and 600,000-square-foot Moffett Gateway.
But CBRE Global is now closing in on owning upward of 40 buildings in the area from dozens of owners. Observers say it’s one of the biggest, most sustained assemblages in a single neighborhood in memory.
Why does CBRE Global Investors love Moffett Park so much? What are the firm’s long-term plans? We’d love to hear from them, but the investment manager has declined to discuss these acquisitions, beyond confirming that they have taken place.