By Jon Peterson
Belmont-based Embarcadero Capital Partners has placed on the market for sale the 189,481 square foot 601 McCarthy Boulevard office and R/D building in Milpitas. The expectation is that the price point on this asset would be somewhere around the high $300 per square foot range, according to sources that track the sale of properties in this market, which could bring the sale to as much as $76 million.
Embarcadero Capital is selling the property through the San Francisco office of HFF. “When Embarcadero first bought this property in 2015, its goal was to make some tenant improvements to the asset and bring in a new tenant to the property. It has now accomplished this, and that is why the property is being brought to the market for sale,” says Ben Bullock, a senior director with HFF and is working on the sale of the property.
When the seller had bought the property, it knew that Samsung would be leaving the property shortly. This tenant had a lease that would expire in April of 2016, and then the asset would be totally vacant. The property owner last year was able to secure a 10-year lease with FireEye, a data securities company. This tenant has now consolidated all of its office in Milpitas into one centralized location in Milpitas for its corporate headquarters.
This property is now considered to be a stabilized asset. “I would think that the type of buyer attracted to this property would include net-lease buyers or investors that are looking for properties that are lower risk and can show strong income going forward,” said Bullock.
601 McCarthy was built in 1998. The property is in a good centralized location. It’s currently served by the VTA light rail. It’s also in close proximity to the planned expansion of the BART rail line and the future BART Milpitas station, which is projected to have passenger service at some point this year.