San Francisco-based Jay Paul Company has closed on the sale of 50 West San Fernando Street (formerly the Knight Ridder building) office property in San Jose for $238 million, or over $691 per square foot, according to sources with direct knowledge of the transaction details. The close was completed on Friday, June 21, and this sale is the third time this asset had traded since the Great Recession.
The seller of the property is a venture between San Francisco-based DivcoWest Properties and Boston-based The Rockpoint Group. The listing agent on the sale was the San Jose office of Eastdil Secured. DivcoWest declined to comment when contacted for this story.
The sellers has had ownership of the property since December of 2015, when the real estate investment firms paid $165.5 million for the building at the time. They had bought the asset from Los Angeles-based CBRE Global Investors, which had acquired the building for $95.6 million in 2012.
50 West San Fernando is a 344,000 square foot office building. There is currently a diverse group of tenants in the property, which includes Accenture, Merrill Lynch Wealth Management, a bureau for public broadcasting station KQED and the Silicon Valley Capital Club.
DivcoWest has done some work to the property while it was under its control. One part of this was the opening up of the 14,000 square foot top floor of the property and converting it into office space. This floor of the building was not considered leasing space in the past, since it had been held by the previous owners as storage space. This part of the building allows for top level views of downtown San Jose.
Divco and Rockpoint had placed the building on the market in April of this year. The asking price was in the range of the closing price. The Registry had initially pegged that amount, according to industry sources, to be around $235 million.
San Francisco-based Jay Paul Company has been a prolific investor throughout the region over the last decade, and its latest foray into San Jose reaffirms its Bay Area wide strategy that follows the employment of major technology companies in the region. Since Google and the city of San Jose had announced their agreement for redevelopment across a number of properties in the Silicon Valley city, developers and investors have made serious investment across a number of property types in San Jose.
In July of 2018, the company invested $283.5 million to acquire San Jose’s Cityview Plaza from Equus Capital Partners. Currently, the complex is composed of 534,036 square feet of office space and 45,505 square feet of retail spread across nine buildings and 11 acres. Jay Paul is proposing to demolish the existing complex and redevelop a Gensler-designed three-building, 19-story mixed-use campus totaling 3.4 million square feet.
This month, the developer also spend $100 million for two properties at the corner of Park Ave. and S. Almaden Boulevard in San Jose. The sellers were Silicon Valley developer John DiNapoli and realty investment trust Blackstone. The two properties, located at 200 Park Ave. and 282 S. Almaden Blvd., were purchased for $50 million a piece. The sites are also directly across the street on Park Ave. from the Cityview Plaza complex, and Jay Paul plans to bring another Gensler-designed project there, a 800,000 square foot development.
Since its founding in 1975, Jay Paul has focused on the acquisition, development and management of Class A, tech-oriented commercial properties throughout California. Currently, Jay Paul has successfully developed more than 11 million square feet of space and has an additional six million square feet in its active development pipeline.