Embarcadero Capital Partners Sells Sunnyvale R&D Building for $28.8MM

Embarcadero Capital Partners, Sunnyvale, Goldman Sachs, 475 Oakmead, JLL, Hines, Vantage Data Centers, Intelli, GI Partners

By Meghan Hall

Sunnyvale’s office and research and development market continues to attract investor interest as the market’s recovery continues. In a recent deal, Belmont, Calif.-based Embarcadero Capital Partners sold 475 Oakmead Parkway for $28.8 million, or about $505 per square foot. The buyer was several entities affiliated with Kenneth Taggart, a private resident of Palo Alto.

JLL’s Will Connors, Daniel Renz, Michael Manas, Cheri Pierce and Andie Fezell marketed the property for sale on behalf of Embarcadero Capital Partners, and Goldman Sachs provided a $13.5 million loan to finance the acquisition. 

Public records indicate that Embarcadero Capital Partners originally purchased the property in December of 2017 for $15.3 million, or about $268 per square foot. At the time, Embarcadero Capital Partners acquired the asset from TA Realty.

The property was constructed in 1980 and was subsequently renovated in 2008. The single-story building totals 57,000 square feet. Currently, the building serves as the United States headquarters for Alpha & Omega Semiconductor, a designer, developer and global supplier of power semiconductors.

According to an offering memorandum obtained by The Registry, AOS has been a tenant at the property since 2010 and recently renewed its lease for 10 years, providing the building’s new owners with long-term cash flow. 

Since signing its lease, AOS has continued to grow. In 2016, the firm announced its 51 percent ownership in a joint venture with two strategic funds owned by the Municipality of Chongqing, China. The partnership’s goal was to diversify AOS’s offerings.

The  property is located in a highly commercial zone where other companies such as Gener8, Dolby Laboratories, Alta Devices and others, are located. A shopping center anchored with a Walmart is nearby, as is Krispy Kreme, In-N-Out Burger and Panera Bread.

“Located in central Sunnyvale directly adjacent to the Lawrence Station Area Plan, the Property is well positioned within one of Silicon Valley’s most competitive and evolving submarkets,” the memorandum states. “…475 Oakmead’s location, just two minutes from US-101 and the Lawrence Expressway, provides tenants with excellent connectivity via these major thoroughfares to the rest of Silicon Valley and the greater Bay Area.”

The market is expected to grow, as development for up to 3,500 residential units, 104,000 square feet of retail and 6.3 acres of public open space are currently in the works, as well as public plazas and recreation facilities. Other nearby development projects include 1250 Lakeside, a mixed-use project with a 263-key hotel and 250 apartments, and Nuevo, Summerhill Homes’ mixed-use project that will feature 988 residences and 40,000 square feet of retail and restaurants.

The nearby R&D market is also rapidly evolving, with 9.6 million square feet of R&D space demolished or converted to campuses in recent years, including Jay Paul’s Moffett Place, which demolished 12 buildings totaling 473,200 square feet. Google leased the entire 1.9 million square foot campus. Over at Station on NOrth First in San Jose, Boston Properties intends to demolish 195,000 square feet of R&D to build  a 1.6 million square foot office campus, while in Santa Clara, Irvine Company is moving forward to replace 28 office and R&D buildings with a 1.7 million square foot campus called Santa Clara Square.

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