By Jon Peterson
Campbell-based South Bay Development Co. has sold 1321 Ridder Park Drive in San Jose for $3.32 million, or $92.50 a foot, to San Jose-based Alpha Tech Consulting Enterprises for its new headquarters location.
Alpha Tech will act as its own general contractor on improvements planned for the building. Founded in 1987 in San Jose, the company specializes in mechanical, electrical, plumbing and engineering services and is perhaps best known for its data-center work including work for Facebook Inc. at its Prineville, Ore., data center. Alpha Tech’s current headquarters are at 97 E. Brokaw Road in San Jose.
At 36,030 square feet, the Ridder Park Drive office building is not quite 45 percent larger than the company’s existing digs, said Jay Phillips, a senior vice president with Cornish & Carey Commercial Newmark Knight Frank in its Santa Clara office. Phillips represented Alpha Tech in the acquisition.
Companies looking for workspace from 10,000 square feet to 40,000 square feet in the Silicon Valley are finding the search difficult, he and Craig Leiker, an executive vice president with Kidder Mathews in its San Jose office, said. Leiker represented the seller. “Leasing options for those space requirements are very limited,” Phillips said, “and it doesn’t make much financial sense for new development to target those space needs.”
“Tenants for this size building are having a hard time finding space to move into on a leasing basis,” Leiker said. “It makes sense for a property of this size to be sold to a user.”
David Andris, a vice president with South Bay, said the company owned the property since 1986. The former tenant, Teradyne Corp., had a seven-year lease. “The company vacated the property over a year ago, but we had been collecting the cash flow from the existing lease. We made a decision earlier this year that it would be a good time to sell,” Andris said.
The property was originally developed in the early 1980s. Leiker estimated that tenant improvements would cost from $60 a square foot to $70 a square foot. “Given that Alpha Tech is a green company, they will be using sustainable materials whenever possible,” Phillips said.
Alpha Tech Chief Executive Jeff Fini declined comment.