By Meghan Hall
Google is continuing to move forward with acquisitions throughout the Bay Area. The tech giant recently closed on a deal to acquire an office property formerly home to semiconductor and integrated circuits manufacture, Texas Instruments in Sunnyvale. In a deal that closed on Tuesday, April 14th, Google paid $28.5 million, or $568 per square foot for the two-story office building located at 165 Gibraltar Court. According to public documents, the seller was Nearon Enterprises, a Walnut Creek, Calif. commercial property investment firm.
The Mercury News was the first to report the transaction.
According to data from CommercialCafe, the single-tenant office building sits on a 2.24-acre lot and totals 48,666 square feet. The Class B property was originally constructed in 2001 and is located in Moffett Business Park.
Nearon originally purchased the property in 1969, according to its website. The investment firm was originally established in 1945. Today, Nearon oversees more than $600 million assets, with its properties concentrated in the Bay Area, Southern California and Utah. The firm owns a mix of industrial, office and retail properties throughout the greater Bay Area, including Sunset Business Park, a 212,000 square foot office complex in San Ramon, and American Building Supply Warehouses, a 521,000 square foot industrial development in Sacramento.
At the end of the first quarter, Sunnyvale had one of the lowest office vacancy rates in Silicon Valley, despite the arrival of COVID-19. According to a Cushman and Wakefield market report released April 7, 2020, Sunnyvale had 12.7 million square feet of office inventory and an overall vacancy rate of just 1.4 percent. The overall asking rent for office property, across all classes, came in at $8 per square foot. However, where fundamentals will stand at the end of the second quarter could be very different, cautioned Cushman and Wakefield. The firm predicts that the next several months could see the largest real GDP declines in U.S. history due to sweeping lay-offs and business closures across a wide variety of sectors.