Los Angeles-based CBRE Global Investors has closed on the acquisition of the 237@First office building asset in San Jose for $173,538,000, or around $470 per square foot, according to public documents. The Registry had reported on May 1st of this year that the deal was pending at under $200 million, which is technically accurate since, according to one source, the $174 million price tag does not include free rent and tenant improvement credits from the seller. Those credits are estimated to be worth about $10 million.
The current ownership of the property involves two companies. One of them is the Los Gatos-based South Bay Development Company, which is the developer of the property. The other is Los Angeles-based PCCP, its equity partner in the project. South Bay Development did not respond to emails seeking commentary for this story. Eastdil Secured was the listing agent on the property when it was marketed for sale earlier this year.
This sale represents one of very few large office building sales to be completed since the market uncertainty started with the outbreak of the coronavirus, although it is coming on the heels of a few recent sales announced in San Jose. Most of the sales of properties have either been delayed or the assets have been taken off the market entirely.
237@First is a 369,000 square foot two-building office complex. The asset is located at 4353 and 4453 North First Street. One of the buildings was first developed in 2016, and the second building was completed in 2019. When the asset was first offered for sale in January, the occupancy stood at 64.5 percent.
The office complex currently has three tenants. One of these is Rambus Inc., which signed a lease to occupy 90,000 square feet at the building located at 4453 North First Street. The company will use this space for its corporate headquarters and was planning to move into the building sometime this summer. Rambus completed its lease in the summer of 2019. Bloom Energy is also using its lease in the property for its corporate headquarters. The third tenant is the shared-workspace company Spaces.