Embarcadero Capital Partners Sells Milpitas’ Murphy Crossing Office Complex for $130MM

Embarcadero Capital Partners, Murphy Crossing, Milpitas, NKF, Soma Capital Partners, True North Management Group

By Meghan Hall

Nearly four months after Embarcadero Capital Partners placed the Murphy Crossing office complex on the market, a deal has closed on the sale of the property. Embarcadero Capital sold the 368,524 square foot property to Soma Capital Partners for $130 million, or about $352 per square foot. The transaction closed last Friday.

The Mercury News was the first to report that the transaction closed. However, The Registry reported in October of 2019 that Embarcadero Capital Partners had placed the asset on the market, with a guidance of $130 million.

“We’re bullish on this area’s long-term growth potential as the Milpitas BART station comes online and tenants continue to expand eastward in the 237 Corridor,” said Peter Horn, partner at SCP. “The strength of the current tenant roster is reflective of these market trends as well as the physical quality of Murphy Crossing and its unique tenant amenities.”

Soma Capital acquired the asset in partnership with Timbercreek Asset Management, a Toronto-based institutional investor with more than $10 billion in assets under its management.

“As a value-oriented investor, Murphy Crossing is a great fit for our portfolio. The acquisition of this asset presents a unique opportunity to invest in a high-quality product, which we believe will continue to benefit from the expansion of the Bay Area’s technology sector,” added Ugo Bizzarri, chief investment officer of Timbercreek. 

Newmark Knight Frank were hired in October to represent the sellers in the transaction. The brokerage team included Vice Chairman Steven Golubchik and Executive Managing Director Edmund Najera. Newmark’s Ramsey Daya and Chris Moritz also helped in the transaction, arranging loan servies to Soma Capital Partners and Timbercreek to secure a first mortage.

Embarcadero Capital and New York-based True North Management Group have owned the office complex since January of 2017, when the pair of investment firms paid $88 million, or about $239 per square foot for the property, according to public records.

The property is comprised of five buildings located along McCarthy Boulevard and Murphy Ranch Road. The buildings were constructed in 1994 and were originally built to serve as Octel Communication Corporations’ global headquarters. The property was subsequently renovated between 2014 and 2015. The buildings range in size from 62,000 square feet to 90,000 square feet. As of October, the property had no current vacancies, and three tenants—Renesas, Sonicwall and Bayer— occupied all of the space in the complex. 

The remaining leases average just over six years. In all, the property totals nearly 20.5 acres. Amenities include an outdoor volleyball court and basketball court, bike storage and an on-site cafeteria. 

Soma Capital Partners is a privately held investment firm based in San Francisco. According to its website, its holdings include office, retail and self-storage assets throughout  the United States. Of the six office assets listed on its website, five are located in California, and one in Colorado. The firm seeks out underutilized properties and has acquired roughly 2.6 million square feet of commercial real estate since its founding in 2014.

West Coast Commercial Real Estate News