Fresh off of a very busy and active 2017, San Francisco-based DivcoWest is continuing to look at opportunities across the region where it can make its mark. According to sources with knowledge of the transaction, DivcoWest just acquired three buildings from Cisco for $50 million, or roughly $159 per square foot. The three buildings located at 125 Rio Robles, 10 W. Tasman Dr. and 80 W. Tasman Dr. total approximately 313,000 square feet, according to public documents.
The three vacant buildings, which are two stories tall and constructed in 1997, also hold around 1,000 parking spaces. The property was marketed by JLL, which represented the seller in the transaction.
Both DivcoWest and JLL declined to comment for this story.
This purchase comes just a month after DivcoWest invested $283.5 million, or $473 per square foot, in the Riverpark Towers in downtown San Jose, a two-building property measuring just over 600,000 square feet. Divco, which started in downtown San Jose when the company was initially founded, still maintains an office there, and today is the largest institutional owner of office space in downtown San Jose and holds about a third of Class A, transit-oriented market, according to sources with knowledge of the firms’ holdings.
Over the last couple of decades, DivcoWest has owned and repositioned properties throughout downtown San Jose: In the 1990s, the company acquired the 305,000 square-foot Community Towers complex and 600,000 square-foot Park Center Plaza (now CityView Plaza). The company sold those assets in the mid-2000s. In 2012, DivcoWest acquired the former Mission West Properties Inc. portfolio in partnership with TPG Real Estate, which included a number of properties across Silicon Valley. This portfolio, renamed to MWest, is another value-add play that the company has been pursuing across the region.
While being a strong believer in San Jose, DivcoWest has also acquired properties across the region while looking to dispose of suitable assets, as well. In November of 2017, the company sold a seven-building portfolio in Santa Clara to a venture between Hollywood director and producer Ivan Reitman and Preylock Real Estate Holdings, a Los Angeles-based real estate investment firm, for $240 million. The 626,000 square foot office and R&D campus is located at the following addresses: 2770-2800, 2880 and 2890 Scott Boulevard, 2220, 2300, 2330 Central Parkway, and 2001 Walsh Avenue. It consists of seven buildings that are 100 percent leased to Nvidia and Huawei.
Just a month earlier, DivcoWest was looking at the possibility of buying the 180 Townsend Street office building. The final sales price on the 41,125 square foot building leased to San Francisco-based technology company Say Media came in at just over $28 million, or around $680 per square foot.
In September of 2017, the company had closed DivcoWest Fund V, its fifth commingled value-add investment fund. Exceeding its US$1.5 billion target, Fund V’s commitments total approximately US$1.585 billion, making it DivcoWest’s largest fund to date with approximately 80 percent of the commitments from existing investors.