Hong Kong-based Gaw Capital, which has been actively expanding its portfolio across the Bay Area, recently spent $93.5 million, or roughly $429 per square foot, to acquire a three-building asset on the corner of W. Trimble Road and Orchard Parkway in North San Jose, according to sources with direct knowledge of the transaction details. The property has one of the addresses located at 2610 Orchard Parkway, and it is home to Toshiba America Electronic Components, which leased the property in 2016.
The seller of the roughly 218,000 square-foot property is San Francisco-based Divco West, which owned the property through its MWest Portfolio acquisition. Divco purchased the asset in December of 2012 for $39,209,000. In 2014, the company completed a full renovation of the project, which was designed by San Jose-based Studio G Architecture.
The property is part of the larger Orchard Parkway submarket in San Jose, which has gone through a dramatic transformation in the last few years. As a result, the redevelopment efforts have resulted in new leases and subsequent successful investor exits.
Earlier this year, another asset on the same street, the 84,696 square foot 2811 Orchard Parkway office building was put on the market by San Francisco-based commercial real estate owner Flynn Properties. The real estate investment firm has owned the asset since July of 2016, according to public documents, when it paid $16,975,000 for the asset, or just around $200 per square foot. Flynn invested more than $10 million, or $120 per square foot, to renovate the property, and now it is 100 percent leased to Fetch Robotics.
Gaw Capital USA is an affiliate of Gaw Capital Partners and provides services for private equity real estate fund management and separate account investments in the United States, according to the company’s web site. Gaw USA through its associate, Downtown Properties, has been investing in US real estate since 1995 and commands assets of $ 2.1 billion under management.
The company pursues a value-driven investment strategy with a strategic focus on repositioning projects located in major knowledge and innovation markets marked by a young, well-educated population and strong employment growth prospects.
Recently, Gaw has been in discussions to acquire the 346,000 square foot, 28-story 123 Mission office building in San Francisco from HNA. Ultimately, they passed on the investment, and the building was acquired by New York City-based Northwood Investors for $290 million, or $840 per square foot.
In May of 2018, Gaw announced the final close of its third US value-added real estate fund, the Gaw Capital US Fund III, bringing total commitment raised for this fund to its hard cap size of US$ 412 million. US Fund III attracted commitments from investors who had previously invested with Gaw Capital in previous funds, as well as new investors. The makeup of the Limited Partners base is approximately 45 percent from the US and 55 percent international, according to a company statement.
Gaw Capital Advisors has put both San Francisco and Seattle among its target markets for its Gaw U.S. Fund III commingled fund, as stated in a board meeting document from the Ohio Bureau of Workers Compensation Fund.