It has been just over a year since Hudson Pacific closed on the massive $3.5 billion real estate transaction in which it acquired 53 properties (33 in the Bay Area) totaling 14.6 million square feet across major West Coast markets. One of those properties, on which it closed almost exactly a year ago for $14.8 million has been sold to an affiliate of KT Properties Urban, Inc. for $19 million in an all-cash, off-market transaction, according to Hudson Pacific.
Tom Trombatore of Colliers International represented the buyer in the transaction.
The property, located on 3055 Patrick Henry Drive in Santa Clara is a 70,520-square-foot vacant R&D office building that is situated inside a complex of office buildings just next to the Great America Parkway and US Highway 101.
Following the purchase of the portfolio, Hudson Pacific stated that it was planning to invest $250 million in tenant improvements over the next three years in its Class A office buildings along the Highway 101 corridor in San Mateo and Santa Clara counties. The average age of the acquired properties is about 20 years old. Improvements and updates to the structures will include lobby renovations, bathroom upgrades and, where tenants turn over, remodeling of office space.
Some buildings, it seems, were meant to be sold for a profit. For instance, in January of this year, Hudson Pacific announced that it sold its Bayhill Office Center in San Bruno, California to online video distribution company YouTube, owned by Google, for $215. This was an all cash, off-market transaction, according to the company, which generated a profit of roughly $28 million for Hudson Pacific. Public documents indicate that Hudson’s purchase price was just over $187 million in a sale that closed in April of 2015.
“Patrick Henry Drive was a non-core holding in our portfolio, and we elected to sell the property after receiving a compelling unsolicited offer above our purchase price allocation,” said Victor Coleman, Chairman and CEO of Hudson Pacific Properties. “Given the strength of our markets and number of qualified buyers, we continue to evaluate disposition opportunities for a select group of assets.”
Regarding the Pactrick Henry Drive location, it is not clear at this point what plans KT and its partner have in play for the development.