Graymark/Pimco Buy Apple Occupied Portfolio in Cupertino for $44MM

Apple, Cupertino, San Francisco, Graymark Capital, Cushman & Wakefield, Bay Area, Silicon Valley

By Jon Peterson

San Francisco-based Graymark Capital along with its equity partner Pimco has paid $44 million, or roughly $400 per square foot, to acquire the four building, 109,779 square feet of office/R&D buildings in Cupertino, according to sources familiar with the transaction.

Graymark Capital declined to comment on the capital source it used on this transaction.

“This acquisition was a good fit for the kind of properties that we like to buy. This would include creative office and R&D properties that are located in in-fill high barrier to entry markets that are targeted by technology tenants, and the properties have mid-term leases. We look to buy assets up and down the West Coast in Silicon Valley, Portland, San Diego, Los Angeles and Orange County. The deal in Cupertino means that that we now own 10 assets in Silicon Valley,” said Brian Hecktman, principal and founder of Graymark Capital.

The sellers of the property was MWest, which is an entity controlled by San Francisco-based DivcoWest and TPG. The previous owners were represented in the sale by Cushman & Wakefield. The listing agents on the sale were Steve Hermann, Eric Fox, Adam Lasoff, Seth Siegel and George Eckard. Lasoff declined to comment when contacted for this story.

The four buildings are located between 10300-10460 Bubb Road. All of the space in the buildings is leased to Apple. These assets are around 3.5 miles from the new Apple Park campus in Cupertino. The tenant in the buildings recently extended an option in one of the buildings, as stated by sources aware of the property. This means that the lease terms left in the buildings goes from four to five years.

The buildings were developed over time from the mid to late 1970s. They had been recently renovated. There will be a potential long-term re-leasing opportunity for the new owners. The existing rents in the property are significantly below market.

The Cupertino office market has very strong operating fundamentals. There is very little if no vacancy in the market now. There also continues to be very strong demand for tenants seeking to occupy space in the market.

West Coast Commercial Real Estate News