By Jon Peterson
Los Angeles-based CBRE Global Investors and Germany-based WealthCap Management will be closing soon on the acquisition of the 263,000 square foot Netflix headquarters campus office building in Los Gatos. The purchase price is projected to be around $730 per square foot or $192 million, according to sources that are familiar with the transaction. The deal is anticipated to have a close within the next couple of weeks.[contextly_sidebar id=”OAyAasffjRyqQBKj86TKHSwoUbGx5v4r”]A company representative of CBRE declined to comment. The feedback that was provided was that the real estate investment manager does not comment on transactions until they have closed. WealthCap did not respond to phone calls or e-mails seeking comment for this story. This company has a regional office in the United States in Atlanta.
The listing agent on the sale of property is the Menlo Park and San Francisco offices of JLL. Those involved in the sale are Erik Doyle, Will Connors, Michel Seifer and Rob Hielscher. They declined to comment for this story.
JLL represented the sellers of the property, the Menlo Park-based Sand Hill Property Company and Washington, D.C.-based The Carlyle Group.
The sales price on the property is projected to produce a mid-five percent net initial yield, according to sources aware of the sale of the property. This return is based on the income coming out of the rent from Neflix.
According to the offering document, which The Registry was able to obtain, Netflix has signed a 10-year triple-net lease on the property that commences this year and runs through 2025 with minimal landlord obligations. Netflix was provided a $50 per square foot tenant improvement allowance, but is planning to invest significantly more of its own capital in addition to the provided allowance. The Netflix lease is schedule to generate $10.5 million in the first year with three percent annual escalations over the entirety of the lease term.
The offering document had requested offers in excess of $185 million for the fee-simple interest in the building, which would have reflected a yield of 5.7 percent.
WealthCap is a fund manager based in Germany. According to its Web site, the firm is a wholly-owned subsidiary of UniCredit Bank AG.