One of the largest R&D building sale transactions of the year closed on May 6th when the Shoe Palace Corporation purchased the 240,000 square foot 755 Jarvis Drive in Morgan Hill from Presidio Development Partners for $12,000,000. Presidio Development Partners and their JV partner Appian Capital originally purchased the property in May 2012 from Hospira, Inc. The property includes a 240,000 R&D building and an additional 8 acre land parcel. According to Cliff Miller, a partner at Presidio “we acquired the property because we studied the market and determined that there were only a handful of big R&D buildings with industrial clear height available in the entire Silicon Valley area and no one is developing them anymore. We felt we would be in a good position when a big user came around.”
The buyer, Shoe Palace, has 49 stores and is the fastest growing athletic footware retailer in the western U.S. having opened 29 new stores since 2007 during the economic downturn. They are Nike’s preferred regional retailer and recently launched a new website. George Mersho, the President of Shoe Palace commented “our business is growing quickly and we needed more space for our headquarters and Norcal product distribution. This property has the room we need now plus land for us to build on to expand in the future.” Shoe Palace plans to relocate from San Jose later this Spring.
Marketing for the property was handled by the CBRE’s San Jose office team of Sherman Chan, Scott Prosser, Nick Whitstone and Ben Knight. Presidio performed renovation improvements to the property to increase its marketing appeal. Presidio also obtained a conditional use permit from the City of Morgan Hill to allow for the distribution functions of Shoe Palace’s operation and according to Miller the planning department was “extremely proactive in expediting the permits to woo this terrific business to Morgan Hill.”