Jay Paul Buys Landbank’s Central & Wolfe Campus in Sunnyvale for $177.5MM

Sunnyvale, Landbank Investments, Menlo Park, Webcor, HOK, Cushman & Wakefield, Silicon Valley, JLL, Bay Area news, commercial real estate, spec developmentUPDATED Dec. 23, 2015

Menlo Park-based Landbank Investments has been busy in the last year preparing for development a site at Central & Wolfe in Sunnyvale, which the company had owned for decades. Today, San Francisco-based developer Jay Paul Co. has closed on the sale of a development site located at 222 North Wolfe Road, in a transaction that is worth $177.5 million, according to public record. Jay Paul took out a $115 million loan from Wells Fargo to acquire the site, according to a statement from Manatt, Phelps & Phillips LLP, which worked with Jay Paul on the transaction. Manatt previously represented Landbank, the original developer of the site, in connection with evaluation of financing alternatives and assisted in negotiating the lease with Apple.

The Manatt team included San Francisco-based partner Clay Gantz, with assistance from associate Grace Yang and counsel Scott Johnson.

Calls to Landbank and Jay Paul were not returned.

Jay Paul beat out two alternative offers, which Landbank had pursued following a decision by Apple Computer not to exercise its option to purchase the development site, according to sources. The Registry broke the news of the tech giant leasing the entire 777,000 square proposed development in September of this year, and then again breaking the news just a few weeks later that Apple was in negotiations with Landbank to purchase the entire future building.

According to sources aware of the details between Apple and Landbank, the lease had been executed for a period of 10 years at $3.50 NNN for the cold shell.

It has been a busy year for Landbank. Since the development’s approval in October of 2014, the industry has been closely following who might occupy the building that promised in many regards to be one of the most recognizable and iconic structures in Silicon Valley. Apple leasing the entire building may have been big news, but it was not so much a big surprise. The tech company had been on a buying and leasing spree for the last twelve months in Cupertino, Sunnyvale and North San Jose, so it was not beyond the realm of possibility that they would take this building, as well.

Landbank, for its part, felt comfortable with the prospects of leasing it fairly quickly, that it was ready to start construction on the project on a speculative basis. “We would start the project on a spec basis if we have to. We are planning to talk with very large major national technology type tenants about taking space in our project. The flexibility that we have allows for the space to be occupied by one to three tenants,” said Scott Jacobs, CEO of Landbank, at the time.

Jay Paul has been aggressively pursuing deals in Silicon Valley, and Sunnyvale is a city where it continues to make a mark. Last month, the company took a step forward in plans for its latest Sunnyvale office project by completing the purchase of 47 acres in the city’s Moffett Park area for approximately $200 million. Moffett Park is home to one of its most significant deals where it is building a 1.9 million square foot campus for another tech giant, Google.

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