DWS Places Apple-Leased Campus in Cupertino on the Market, Pricing Could Reach $320MM

By Jon Peterson

New York City-based DWS Group, formerly known as RREEF, has placed on the market for sale the ten-building, 384,000 square foot Results Way office complex in Cupertino. The potential pricing on the sale could reach $320 million, or roughly $833 per square foot, according to multiple sources that track the sale of major office buildings in Silicon Valley.

DWS declined to comment when contacted for this story. The listing agent on the sale is the Silicon Valley office of Eastdil Secured, which is located in San Jose led and led by Greg Cioth, managing director, as stated on the company’s website. The seller of the property has held ownership in the asset since December 2013 when it purchased the property from Belmont-based Embarcadero Capital Partners for $165 million, according to sources familiar with the sale.

All of the ten buildings in the property are leased to Apple, which may attract broad interest from the market as a result. Single-tenant properties leased to strong credit companies are getting more interest from investors, according to industry sources. Investors would prefer not to deal with multiple tenants during the time of economic uncertainty, since tenants are not sure what their future office space needs will be, and there may not be other tenants in the market seeking to lease space.

The lease with Apple runs through November 2029, and the lease is structured in a way where the tenant has agreed to annual rent increases of 3 percent. Results Way is located at 2 to 16 Results Way in what is commonly referred to as Apple’s company’s town. Apple has a major impact on the office/R&D market in Cupertino, which includes owning or managing 53 buildings totaling nearly 7.8 million square feet. This amount of space covers 81 percent of the office/R&D space in Cupertino.

The overall Cupertino office market remains very tight for leasing. According to data from Kidder Mathews for the second quarter of 2020, the total vacancy rate for office buildings in Cupertino is 1.45 percent. This city has the lowest vacancy rate of any office market in Silicon Valley. There is also no planned construction of new office buildings in Cupertino in the near term.

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