By Meghan Hall
While the health of the office market has been questioned by some, assets with reliable credit tenants continue to attract eager investors. In a transaction that closed at the end of last week, Taiwan-based PMP Tech purchased six Cupertino office assets for a total of $98 million. The seller was the Real Estate Trust Valley Community Foundation, a Mountain View, Calif.-based non-profit. Together, the assets total 136,105 square feet and are all currently leased to Apple.
The portfolio of assets hit the market in June of this year. At the time, The Registry reported that guidance for the properties sat at around $90 million, or about $660 per square foot. CBRE’s Scott Prosser, Jack DePuy and Russel Ingrum represented the seller in the transaction while Cushman & Wakefield’s Tenny Tsai represented the buyers.
“This portfolio presented a rare, secure asset with strong, long-term credit tenancy in a very desirable Cupertino location, which appealed greatly to my client as a long-term investment,” said Tenny Tsai, who has served as PMP Tech’s exclusive broker representative since 2012 and has worked with the group on several asset acquisitions. “PMP Tech has remained bullish on U.S. real estate, and particularly assets with credit tenants in top performing markets such as Silicon Valley.”
The buildings sold for a variety of prices. 20730 Valley Green, 20740 Valley Green and 10627 Brandley sold for a combined $50.2 million. The Valley Green assets include a 22,561 square foot wellness center, while the Brandley Drive property includes a 16,000 square foot fitness center. The buildings have leases with Apple that expire at the end of 2028 and have three five-year renewal options. Rental Rates are about 13 percent below market rates.
10341 Bubb Road was purchased for $13.6 million, while 10231 Bubb Road sold for $9.4 million. 10341 Bubb totals 27,000 square feet; Apple’s lease expires in March of 2024, and the existing lease is currently about 15 percent below market rate.
With more than 40 years in business, PMP Tech operates as a product supplier to multinational clients all over the world. Through the investment PMP Tech intends to create stable cash income while contributing to charitable causes as part of its business philosophy.
Currently, Apple owns or manages 53 office and R&D buildings within Cupertino alone, which total 7.8 million square feet of space and accounts for 83 percent of the city’s building stock. Last month, another four Apple-leased buildings in Cupertino sold for $73.8 million to a high-net worth individual. In August, DWS placed another Apple-leased campus on the market. Located along Results Way, DWS Group is seeking $320 million for the 384,000 square foot property. Apple’s lease at the property continues until November of 2029.