Kilroy Realty Sells Mountain View Office Asset to Goldman Sachs for $75.9MM

By Meghan Hall

A Class A office building located in Mountain View has traded hands after nearly a year of limited sales and investment across the region. In a transaction that closed on December 1st, Los Angeles-based Kilroy Realty sold off a single building to an affiliate of Goldman Sachs for $75.9 million.

The Mercury News was the first to report the deal. Goldman Sachs also received $58.7 million in financing from private equity fund West Core Lending. 

The property is located at 331 Fairchild and was originally developed by Kilroy Realty. Kilroy originally placed the property up for sale in the beginning of March of this year. At the time, sources familiar with the property and the market pegged guidance at about $90 million. However, these estimates came just before COVID-19 took root and causing much of the market to pause. 

Newmark Vice Chairmen Steven Golubchik and Edmund Najera, as well as Associate Director Darren Hollak represented Kilroy in the sale.

Slated for general office uses, the building totals 87,147 square feet and sits on about a five-acre lot, based on reporting previously done by The Registry. Current tenants include Blackberry and Knowles Intelligent Audio. At the time that the asset was placed on the market, Knowles Electronics had leased the entire building and had a remaining lease term of 3.25 years. The supplier of audio processing components had been paying a rental rate about 25 percent below market value. Since then, however, Blackberry has taken the entire ground level as well as an additional suite on the third floor.

The office building itself features 29,000 square foot floor plates, 16-foot clear heights and on-site amenities such as outdoor patio space, barbecue areas and on-site showers.

The property is well-located, just off the Bayshore Freeway within what is known as the “Platinum Triangle.” The neighborhood is packed with major technology firms, many of whom occupy multiple buildings. Google, occupies 7.8 million square feet in the vicinity. Apple has taken 4.7 million square feet while Facebook, who follows closely behind at 4.6 million square feet. Also nearby is Microsoft, who holds 1.6 million square feet of space.A recent report released by brokerage firm Newmark Knight Frank states that while good news and large-scale investment is currently hard to come by in Silicon Valley, there are some positives to the market that will continue to attract investors. Vacancy, overall, has remained relatively stable and only risen about 1.8 percent, still lower than vacancy in 2017 and 2018. 

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