By Jon Peterson
Los Angeles-based CBRE Global Investors will be paying $610 million to buy 940,000 square feet of office buildings located at 3333 Scott Blvd. in Santa Clara, as stated by sources with direct knowledge of the transaction. The deal has a projected closing sometime shortly after Labor Day. The per square foot price comes to just over $723.
The properties are three eight-story buildings that all are leased to Palo Alto Networks. The lease with this tenant has another 11 years left to run. Also included in this property is a 40,000 square foot wellness and fitness center.
CBRE Investors is planning to buy this asset with some of the capital for the transaction coming from the California State Teachers Retirement System as a separate account investment, according to sources familiar with the transaction.
The seller of the property was a venture with Palo Alto-based Menlo Equities and Boston-based Beacon Capital Partners. Menlo Equities hired the San Jose and San Francisco offices of Eastdil Secured as the listing agent. Menlo and Eastdil declined to comment when contacted for this story.
Menlo Equities was the development partner in the venture with Beacon providing most of the capital for the development of the properties.
These two firms will have completed the sale of all three phases of project at 3333 Scott Blvd. once the Palo Alto Networks buildings transaction goes through. The total sales amount of the phases will be $1.1 billion. Earlier this year, CBRE Investors and CalSTRS paid $162.5 million to buy an office building for the second phase. This is a six-story building totaling 250,000 square feet that is leased to Hewlett Packard on an 11-year lease.
The assets in the first phase combine a total of 450,000 square feet in three office buildings. These properties are 100 percent leased to Palo Alto Networks and Hitachi. These assets were acquired by New York City-based Clarion Partners in January of 2016 for just over $305 million. The real estate manager made this acquisition for the Oregon Public Employees Retirement Fund as a separate account investment.