By Jon Peterson
New York City-based Blackstone Real Estate Partners has put on the market for sale the 155,613 square foot office building located at 2851 Junction Avenue in San Jose, according to sources familiar with the property. The real estate manager had acquired the property for $76 million, or $490 per square foot, in November of 2016, according to public documents. Blackstone had acquired the property from Hines Real Estate Investment Trust as part of a massive disposition of assets worth $1.162 billion.[contextly_sidebar id=”64hzkV1xS5SHtQA0sygmqFzyD7Uw39Rk”]Blackstone has hired JLL as the listing agent on the sale. Two people involved are Michel Seifer, a managing director in the San Francisco office, and Will Connors, a managing director in the Menlo Park office. Both the property owner and brokerage firm declined to comment when contacted for this story.
The expectation is that given the stabilization of the property and that the asset is located in the highly desired Silicon Valley market, there should be very strong interest in the property, as stated by sources tracking the sale of properties in the San Jose region.
The property is now fully occupied on a triple-net lease to TSMC North America (Taiwan Semiconductor Manufacturing Company). The lease runs through September 18, 2029. The asset was last renovated in 2013/2014 at a cost of approximately $9 million. The work done on the property included base building upgrades and TSMC’s extensive improvements.
The asset is likely to attract interest from core buyers who are looking to buy an asset in Silicon Valley. The property is in a good location, in proximity to transportation and other amenities. It’s a short walk from the Santa Clara Valley Transportation Authority Light Rail Orchard station and is a six-minute drive from the San Jose International Airport. There are 8,000 new residential units and numerous retail amenities, including more than 30 restaurants and a dozen hotels surrounding the property.
The property was originally developed in 2002. The asset is a four-story building over a total of 6.3 acres. Blackstone had acquired the property from Hines on behalf of its commingled fund, Blackstone Real Estate Partners VIII.