By Jon Peterson
On the heels of several Silicon Valley deals in the recent past, San Francisco-based Drawbridge Realty is now in the process of selling the 71,409 square foot 950 Page Mill Road office building located within the Stanford Research Park in Palo Alto.
“When we struck the recapitalization of our company at the end of 2014 with KKR, we looked at our existing portfolio and decided that it might make sense to sell some of our assets that could attract a high level of interest from many buyers. We chose to do this 950 Page Mill and the recently sold 2637 Marine Way in Mountain View,” says Mark Whiting, co-founder and chief executive officer of Drawbridge.
The seller has picked a buyer and has set an agreed upon price for 950 Page Mill. He declined to name the buyer or the price that has been set upon. The transaction will not close until the late third quarter or the early fourth quarter.
“The new owner that has been selected is a 1031 Exchange buyer. The property is owned through a ground lease with Stanford University. For a 1031 Exchange to work with a ground lease, the term of the ground lease needs to last 30 years. This property has an existing ground lease that runs 25 years. The potential buyer and Stanford are now discussing this situation. That is why it will take the deal a little longer to close,” said Whiting. Stanford University stated in an e-mail that it does not comment on prospective transactions.
950 Page Mill was build in 2005 and is an office building that is 100 percent leased to the law firm of WilmerHale. The lease with this tenant has another seven years left to go. The listing agent on the sale of the property is the San Francisco office of Eastdil Secured. This includes Jeff Webber, senior managing director, and Mark Penrod, managing director.
Drawbridge also announced earlier this week the all-cash, $14.9 million sale of 2637 Marine Way in Mountain View. This is a 20,813 square foot office building that was sold and leased to Google. “We made a good profit on this property as we probably invested somewhere in the range of $5 million to $6 million into the property over time. We had owned the asset since 2000,” said Whiting.
Drawbridge continues to look for additional properties to buy in the San Francisco Bay Area and other new markets as well. It has been looking at and making bids on assets in Seattle and Portland, but has yet to close a deal in those markets.