KBS Realty Sells Portion of San Jose Campus for $48.3MM

By Vladimir Bosanac

The Technology Centre, a sprawling, 615,233 square-foot, 8-building office complex that stretches along Holger Way in north San Jose has been in KBS’ ownership since March of 2013 when the company purchased it from Equity Office for $239 million, or roughly $388 per square foot. Earlier this month, KBS sold two of the 8 buildings located at 450 and 475 Holger Way to two groups for a combined $48,296,000, or just over $427 per square foot.

The buyer of the 450 Holger Way property, which has a 93,000 square foot building on site, is Microchip Technology, a semiconductor maker and also the tenant in the building. This building sold for $40,846,000, according to public records, or nearly $438 per square foot.

The building at 475 Holger Way is much smaller, just around 20,000 square feet, and it sold for $7,450,000, or just over $372 per square foot. The entity that purchased that location is a venture between Stockton-based MSK Ventures and Sierra Vista Apartments. The tenant in this building is Yamaichi Electronics USA.

The buildings in Corporate Technology Centre are situated on eight separate parcels and are steel frame construction and offer access to State Highway 237, US Highway 101 and Interstate 880. The buildings range from 20,009 to 101,194 square feet and have an average floor-plate of nearly 31,500 square feet. The complex was constructed between 1999 and 2001.

San Jose, which is the largest of the all office markets in Silicon Valley at nearly 29 million square feet, is also a very diverse and geographically broad market. Overall Q4 2017 availability in the San Jose market was at 16.1 percent, which is second highest to Santa Clara, which itself came in at 22.8 percent, according to a market report from Colliers International. Santa Clara’s availability has decreased a bit year-over-year from 24.8 percent, but San Jose’s overall availability has gone up from 13.6 percent a year earlier. According to the report, San Jose was the only Silicon Valley submarket in 2017 to have negative absorption on a year-to-date basis, and it is in the process of delivering nearly 700,000 square feet of additional product.

However, north San Jose has some of the newest product on the market in the region, and the 237 corridor connects it to Sunnyvale and other parts of the Bay Area. The 237 corridor in Sunnyvale especially has seen a slew of activity recently with Facebook, Google and Amazon taking space in new developments in the last few months.

West Coast Commercial Real Estate News