Digital Realty Sells The Campus @ Ardenwood in Fremont for $73.3MM

By Vladimir Bosanac

A four-building office campus in Fremont, which is surrounded by some of Silicon Valley’s most prominent developers changed hands in February for $73,283,000, according to public records. The Campus @ Ardenwood is a roughly 322,758 square foot property built in 1986 on the corner of Ardenwood Blvd. and Kaiser Dr. The property was sold by San Francisco-based Digital Realty. The public REIT had 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 buyer was REEF America, an affiliate company of Deutsche Asset Management, and the sale closed on February 13 of this year, according to the deed filed with the county.

Digital Realty had placed the asset on the market in late 2017, and it was looking for bids around $90 million, according to our reporting. While it was not able to achieve that pricing, Digital Realty still gained nearly 55 percent over what it paid for the asset fifteen years ago.

The sale was initiated since the property no longer fit 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,” said John Stewart, senior vice president of investor relations for Digital Realty in November.

JLL had worked on behalf of the seller, and Boehringer Ingelheim is a tenant in the property.

The property is next to two assets owned by the Sobrato Organization. One of them has recently been occupied by Menlo Park-based Facebook, which is headquartered across the bay via Dumbarton Bridge. To the south of the property are a number of land parcels and a 15-building complex owned by Peery Arrillaga, as well as a smaller, two-building property owned by LBA Realty. A housing community sits to the northeast of the complex REEF just purchased.

The city of Fremont has undergone a tremendous amount of development and interest in recent years. Following Tesla’s arrival in the city some years ago, residential and office developers have looked at the East Bay city quite favorably, and a number of transactions have occurred in recent past. The city has truly benefited from its proximity to Silicon Valley as well as the Peninsula. And its connectivity to the rest of the region via BART has been tremendously helpful in achieving interest from employers in the region, as well.

West Coast Commercial Real Estate News