(EDITOR’S NOTE: According to several published releases, DivcoWest’s deal worth $240 million closed on October 19, 2017. The combined per-square-foot price comes to around $383. The buyer was a venture between Hollywood director and producer Ivan Reitman and Preylock Real Estate Holdings, a Los Angeles-based real estate investment firm. The property is fully leased to Nvidia and Huawei’s U.S. R&D subsidiary, Futurewei. The purchase was financed by a $195 million loan from Natixis.)
Meridian Capital Group Arranges $195 Million in Bridge Financing for Preylock Real Estate Holdings’ Acquisition of Seven Triple-Net Leased Office Buildings in Silicon Valley, CA
Meridian Capital Group, America’s most active dealmaker, arranged $195 million in bridge financing for the acquisition of seven triple-net leased office buildings in Santa Clara, CA, on behalf of Preylock Real Estate Holdings (“Preylock”), an ongoing client of Meridian.
The seven-year floating-rate loan features an initial five-year term followed by two one-year extension options and full-term interest-only payments. Meridian generated competition among a variety of lenders capable of structuring the transaction and ultimately closed the loan with an international bank that was able to provide flexible property release provisions and a competitive spread over LIBOR. This transaction was negotiated by Meridian Vice Presidents, Kovi Elkus and Jackie Tran, and Managing Director, Seth Grossman, who are all based in the company’s Carlsbad, CA office.
Silicon Valley is in the southern part of the San Francisco Bay Area and is surrounded by the beautiful, tree-lined Santa Cruz Mountains. It is home to some of the world’s leading technology companies, exciting new startups, and innovators. The 626,000 square foot office and R&D campus is at the center of the high-tech hub and spans 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% leased to Nvidia and Huawei, two of the most innovative technology companies in the world. Four of the buildings serve as the U.S. headquarters for Huawei, a multinational telecommunications equipment company that is currently the world’s third-largest smartphone producer. The remaining three buildings are leased to Nvidia, inventor of the graphic processing unit (GPU) and innovator in the field of PC gaming, computer graphics, AI, and more. Occupying nearly the entire square block, the campus is conveniently situated at the intersection of the Central Expressway and the San Tomas Expressway, and just blocks away from the 101 Freeway and the San Jose International Airport.
“With seven properties, two tenants, multiple lease expiration dates, and different uses throughout the buildings ranging from office to warehouse to high-tech cleanrooms, Preylock was focused on obtaining a loan that was complementary to the entirety of their business plan, with a lender that was supportive of their vision,” said Mr. Elkus. “Meridian was successful in identifying a lender who could quickly underwrite this transaction and close in only 34 days after signing a term sheet, a rarity for a portfolio of this size.”
Preylock Real Estate Holdings is an owner, operator and developer of commercial and residential real estate primarily located on the West Coast. Preylock utilizes a relative value approach to real estate investing, identifying unique investment opportunities in highly targeted, supply-constrained markets. Generally, seeking to acquire assets that trade at a discount to replacement cost and/or comparable assets in neighboring sub-markets. The company is currently focused on the acquisition of value-add and core plus office buildings located in major West Coast sub-markets. To date, Preylock has acquired three assets totaling ~1 million square feet, investing approximately $400 million. www.preylockholdings.com
Founded in 1991, Meridian Capital Group, LLC is one of the nation’s largest commercial real estate finance and advisory firms. Meridian is headquartered in New York with offices in New Jersey, Maryland, Illinois, Florida and California. Working with a broad array of capital providers, Meridian arranges financing for transactions ranging from $1 million to more than $500 million for multifamily, co-op, office, retail, hotel, mixed-use, industrial, healthcare, student housing, self-storage and construction properties. www.meridiancapital.com