What Value A Good Name? A Lot
By Jon Peterson
A Seattle-based real estate investment firm has learned what every Silicon Valley landlord already knows: Having names like Google Inc. and Apple Inc. associated with your property can translate to big bucks.
Metzler Real Estate has sold a 52,000 square-foot Cupertino office building within walking distance of the Apple campus for $20.4 million, or $389 a square foot, while last year the investor traded a Mountain View office building to Google for $74 million, or $435 a square foot. The Mountain View building is downtown and within walking distance of a Caltrain stop.
The 10381-10443 Bandley Drive offices in Cupertino are three-quarters occupied by Apple, while the remaining square footage is leased to Italian motorcycle maker Ducati. “The terms of the lease with Apple will make sure that the property will be 100 percent leased for the next 10 years,” said Don Wise, Metzler president and chief executive.
Metzler’s property in Mountain View was the 171,000 square-foot Mountain View Courtyards.
Metzler bought the Bandley Drive property in 2007 on behalf of its sponsored fund, Metzler North America Partners LP, which represents German and U.S. high net-worth investors. The property consists of two single-story office buildings.
Metzler paid $15.4 million, according to Jones Lang LaSalle. It knew it had some work to do on the leases. “We look for value-add investment opportunities where we can buy a property, make the necessary improvements, then turn it into a core property and sell it,” Wise said.
The Cupertino offices were sold in an all-cash deal. There was no debt on the property for the buyer to assume. Metzler would not identify the buyer other than to say it was a private investor. He also would not disclose the capitalization rate.
Joe Moriarty and Robert Steinbock, senior vice presidents for CBRE Inc. in its San Jose office, represented Metzler.
“We are still very much interested in finding other office buildings that we can buy in” Silicon Valley and San Francisco, Wise said.
Metzler has $2 billion in real estate assets under management. The company holds properties on average for five to seven years. It considers markets across the country and a variety of property types, including offices, industrial buildings, retail space, apartments, hotels and special-use buildings.