By Jon Peterson
San Francisco-based Digital Realty could be offered bids of around $90 million for its sale of the 322,757 square foot Campus at Ardenwood office and R&D property in Fremont, according to sources with direct knowledge of the transaction.
Digital Realty would not comment on the potential sales price of the property when contacted for this story.
The public REIT is now selling the property in Fremont since it no longer fits into the company’s current investment strategy. “We are now focused exclusively on investing in data centers and reallocating capital and resources to our core assets that represent a better opportunity to create value for our shareholders,” says John Stewart, senior vice president of investor relations for Digital Realty. The property is a four-building asset located on the corner or Ardenwood Blvd. and Kasier Dr. The location is practically on the border with Newark, just north of State Route 84 (Dumbarton Bridge).
This investment strategy has not always been the case for the company. “When the company formed its initial public offering in 2004, its mandate was technology-related real estate. The portfolio at that time was two-thirds data centers and a handful of tech manufacturing and office buildings leased to technology companies like Ardenwood,” said Stewart.
Digital Realty is expected to realize a sizable gain on the sale of Ardenwood. The public REIT has owned the asset since January 2003. At that time, the property was acquired for $47.7 million, as stated by Digital Realty in an e-mail.
The company is selling the property through JLL, who has also declined to comment when contacted for this story.
The new owner of the property will have a chance to add some value to the asset in the future. One of the buildings in the four-building asset is entirely empty; this building totals 45,000 square feet. The other three buildings are now fully leased. The tenants in these buildings are a top-20 pharmaceutical company, a biometric identity company, Crossmatch, and a sports broadcast/media company, Sportvision.
Ardenwood was originally developed in 1985. All of the buildings are single-story assets.