Los Angeles, CA – CBRE Capital Markets’ Debt & Structured Finance team has arranged $120 million in financing for two office buildings totaling 260,000 square feet, located within Main Street Cupertino, in Cupertino, California.
John Nelson and Erik Franks of CBRE’s San Francisco office arranged the financing on behalf of the borrower, a joint venture between Sand Hill Property Company and its capital partner. The interest rate was a variable, LIBOR-based rate. Financing was provided by HSBC Bank USA, National Association.
Of the financing, Mr. Nelson said, “The project’s central location and ambiance will make it highly sought after by office, retail and residential tenants, as well as hotel guests. Sand Hill Property Company is creating an iconic project; the central gathering place for Cupertino.”
Main Street Cupertino is a state-of-the-art, mixed-use project designed to serve as the town center for Cupertino. The development consists of office, retail, hotel and loft apartments. The offices were completed earlier this year, while the retail component is slated to be completed by the end of 2016. Several retailers are already open for business, including Lazy Dog, Lyfe Kitchen, TD Ameritrade, Eureka! Burger, and Philz Coffee. The hotel, which is franchised to be a Marriott Residence Inn, and apartments are slated to open in 2017. The development is accentuated by a dynamic urban-contemporary design which will include a one-acre town square and a half-acre park.
Located in the heart of Silicon Valley, Cupertino is home to several of the largest technology companies in the world and boasts a 2016 Average Household Income of $188,627. Its prominent location allows retailers, as well as employers, to draw from West Valley communities along the I-280 corridor, producing a diverse group of employees and clientele. Cupertino’s demographic profile is truly unique in comparison to any other city in the Bay Area.
The market has seen the growth of high-income tech jobs, which have had a positive effect on the economy and the commercial real estate market. The Cupertino office market is one of the tightest within Silicon Valley—as of Q1 2016, total overall office vacancy was 2.2%, representing more than 4.2 million square feet within the submarket, according to CBRE Research. The Cupertino multifamily and hotel markets continue their strong pace with rising rents, room rates and minimal vacancies.