By Meghan Hall
Stanford Research Park is home to 150 companies across 700 acres of land in Palo Alto, and is highly sought-after by both tenants and investors alike due to its proximity to many of the Bay Area’s largest and most impactful employers. Pasadena, Calif.-based Alexandria Real Estate, one of the nation’s largest developers of life sciences, technology and agtech campuses, continues to show its interest in the campus and has purchased a 97,000 square foot office building in a transaction that closed on August 12th. First reported by The Mercury News, the property, located at 3160 Porter Dr. sold for $97 million, or about $1,000 per square foot.
The property remains on land owned by Stanford University, which has leased it to Alexandria for 51 years without an option to renew or to purchase the land at the conclusion of the agreement. Alexandria has agreed to pay $26 million for this lease, according to public documents.
Currently, Stanford Health is the tenant in the building. The acquisition is the second between Alexandria and Stanford this year; in January, Alexandria purchased 3170 Porter Dr. from the university. Alexandria paid $100 million, or $1,000 per square foot again, for the 100,000 square foot office. The current tenant is Jazz Pharmaceuticals, who occupies the entire building. Stanford University will continue to own the land beneath both buildings.
Stanford Research Park has been a staple in the Silicon Valley office market for decades, beginning in 1951 when the park’s first tenant — Varian Associates — broke ground. The Park has a long history of innovation, and is where Hewlett-Packard developed electronic instruments that led to the creation of laser printers and the mainframe computer. The research park is also where Facebook was headquartered and where the platform took off in popularity, growing to more than 750,000 million people worldwide. Today, some of Stanford Research Park’s main tenants also include Tesla, Ford, Lyft, Nest, SAP and Lockheed Martin.
The Park also boasts many amenities including the Matadero Creek Trail and The Dish, a four mile scenic loop, and is close to numerous shops and restaurants such as The Bistro, VMware Café and the Stanford Shopping Center.
The Palo Alto submarket also remains strong, with a seven percent vacancy rate and roughly 460,047 square feet of available space. Currently, more than 200,000 square feet of new office space is in the pipeline as well, according to a second quarter report released by Cushman & Wakefield. Because Stanford Research Park is a highly sought-after innovation cluster, the campus continues to boast low vacancy rates and attract new tenancy, maintaining its status as one of the top places to be for growing companies.