By Jon Peterson
Norfolk, Va.-based Harbor Group International has paid $66.25 million to acquire the 88,580 square foot Torre Plaza office building in Cupertino located at 10201 Torre Avenue.
This will be the company’s second acquisition in Cupertino in the last five months. Its other deal closed in December 2016, which was the $67 million acquisition of a 100,325 square foot medical office building located at 19000 Homestead Road. This deal was done with New York City-based Thor Equities. The property is 100 percent leased to Kaiser Permanent through February 2023.
“Cupertino has one of the lowest vacancy rates for Class A office product in the country. In both of our Cupertino acquisitions, we were able to acquire single tenant assets leased to credit tenants. The tenant quality in both transactions, combined with the strong office market fundamentals in Cupertino, makes the transactions very attractive on a risk-adjusted basis,” said Richard Litton, Jr. president of Harbor Group in a prepared statement.
Torre Plaza is leased to a single tenant. This is Amazon’s Lab126, also known as the Amazon devices team that developed such products as the Kindle, fireTV and Amazon Echo. The lease with this tenant runs through 2025.
The purchase of the property was partially funded by an acquisition loan. The CBRE Capital Markets’ Debt & Structured Finance team arranged a $45 million loan for acquisition financing. This debt was structured as a 10-year interest-only loan. “There were several factors that made this property attractive to a number of lenders. This included strong sponsorship, the current makeup of the Cupertino office market and very strong credit in the property,” said Shawn Rosenthal, an executive vice president with CBRE. He works out of the company’s office in Midtown Manhattan.
The seller of the property was Newport Beach, Calif-based River Rock Real Estate Group. The listing on the sale was handled by JLL’s Bay Area Capital Markets team. It included Will Connors, Dan Renz and Nicole Zanghi. JLL declined to comment when contacted for this story.
River Rock had owned the asset since April 2011. The investment firm had paid $32.7 million for the property at that time, according to public records. The asset covers 4.2 acres of land.