Graymark Capital Purchases Apple-Leased Building in Sunnyvale’s Peery Park for $45.25MM

Graymark Capital, Apple, Sunnyvale, San Francisco, LinkedIn, Mercedes, Nokia, Volvo, Synopsis, Kidder Mathews, Silicon Valley, Newark, Cupertino, Alphabet
Image Credit: Graymark Capital

By Meghan Hall

Peery Park is located northwest of Sunnyvale’s downtown and is one of the older areas of the  city. However, the district has seen a wave of revitalization with initiatives like the Peery Park Specific Plan and developments like Pathline Park drawing major technology tenants to the area. Investors such as Graymark Capital see plenty of opportunity in Peery Park and Sunnyvale, and the San Francisco-based firm purchased a 78,623 square foot office building located at 785-787 N. Mary Ave. for $45.25 million, or around $575 per square foot, in February 2018, public documents show. The building is currently leased by Apple, according to industry reporting.

According to Graymark Capital’s site, the building is 100 percent leased with a medium-term lease in place. The lease for the building is below market rate, although upon the lease’s maturity, Graymark expects to roll the rents to market.

The R&D building is located right across from Irvine Company’s future 1.3 million square foot Pathline Park project. Peery Park has a 1.8 percent R&D vacancy rate, with other tenants in the area including LinkedIn, Mercedes, Nokia, Volvo and Synopsis. According to Kidder Mathews’ 4th Quarter Silicon Valley R&D Real Estate Market Overview, the Silicon Valley R&D market ended the year on a strong note, with 430,000 square feet of absorption and nearly 6.2 million square feet of R&D leasing activity. Compared to the rest of Silicon Valley, Sunnyvale has one of the lower total vacancy rates for R&D space, at 5.1 percent. Newark and Cupertino have the lowest rates, at 1.40 percent and 1.10 percent, respectively.

Graymark Capital’s acquisition of the building will continue to build upon a busy fourth quarter of investment into Silicon Valley; sales volume reached over $1.2 billion during the fourth quarter of 2018, bringing the year’s total to $2.6 billion. Compared to 2017, dollar volume rose 24 percent on R&D Sales. Other notable purchases’ such as Alphabet Inc.-owned Google’s acquisition of Chesapeake Terrace for $160.3 million continue to show strong interest in the area, where experts like Kidder Mathews expect high investment demand to continue.

Graymark Capital declined The Registry’s request for comment.

West Coast Commercial Real Estate News