Veteran Investment Team of Eric Rosenthal and Andy Kwon Closes First Deal with New Platform, Completing $54.5 Million Silicon Valley Acquisition in JV With Miramar
NEW YORK and SAN JOSE, Calif., Aug. 13, 2020 — Machine Investment Group, a real estate investment platform based in New York and focused on opportunistic, distressed and special situations across the United States, officially launched its business with the $54.5 million acquisition of Stevens Creek Executive Park in San Jose, California. Under the leadership of real estate veterans Andy Kwon and Eric Rosenthal, previously senior leaders of real estate investing at Garrison Investment Group, Machine acquired the site, which currently consists of 164,986 square feet of existing offices and entitlements for 582 multifamily units, 10,000 square feet of retail, and additional office space on the 9.23 acre site.
Centrally located in San Jose within the desirable Cupertino Union School District, less than two miles from both Apple’s global headquarters and the Santana Row luxury shopping district, the Stevens Creek Executive Park site offers a stellar location. With this acquisition, Machine and JV partner Miramar Capital Advisors have gained control of over 9 acres of entitled land in a highly desirable, growth constrained market.
“Our first acquisition together as Machine exemplifies who we are as investors, and is consistent with our track record of successfully pursuing middle-market investment opportunities at Garrison,” Mr. Kwon, Managing Partner of Machine Investment Group said. “We acquired Stevens Creek Executive Park at an attractive basis and we have an open mind about the possibilities for its best use. For example, multiple factors indicate that multifamily residential, both market-rate and affordable, should be in high demand in this location. Our investment process involves evaluating assets utilizing a diligent and unemotional approach to allocating risk and protecting capital, which often leads to plays that seem contrarian but that stand up well to fact-based analysis.”
With Stevens Creek Executive Park, Machine identified an opportunity to acquire from a motivated seller a well–located mixed–use office park with in-place entitlements, well-suited to the area’s position in the path-of-growth. The site is in a prominent high–barrier–to–entry location near major demand drivers, in a prime area for large-scale mixed-use redevelopment. Located within the Stevens Creek Urban Village Plan, the property is situated in a growth area with broad appeal to residents and businesses due to more affordable rents than other Silicon Valley submarkets. Local multifamily fundamentals are strong, with favorable demographics as San Jose continues to attract high paying jobs and the local economy is one of the fastest growing in the United States. Stevens Creek Executive Park also has excellent transportation access.
“Machine seeks out opportunities within all major and specialty property types, located in emerging and existing institutional markets across the United States,” said Mr. Rosenthal, Managing Partner of Machine Investment Group. “The common theme is that these are growth markets with diverse demand generators that offer attractive yields and advantageous entry points. In the case of our investment in Stevens Creek Executive Park, we see this section of San Jose as more than a ‘tech market.’ Other less cyclical businesses like health care lend just as much support to our belief in the local job market, and long-term demand fueling an already supply constrained residential market.”
During their tenure at Garrison, Mr. Kwon and Mr. Rosenthal personally invested over $1.5 billion of equity together. “We have invested together for many years with considerable success, and Machine is the natural evolution of our journey in real estate,” Mr. Kwon said. “We’re pleased to officially launch Machine as we close on Stevens Creek Executive Park. We are looking forward to adding more opportunities to our platform, especially as current events bring dislocation to many of our target markets.”
About Machine Investment Group
Machine Investment Group is a real estate investment platform focused on opportunistic, distressed and special situations across the United States. Founded by former senior executives from Garrison Investment Group, Andy Kwon and Eric Rosenthal, Machine invests primarily in the middle market, where its reputation as a reliable counterparty, its solutions-oriented approach and extensive lender relationships distinguishes the firm from the competition. Machine’s strict risk discipline, institutional operating processes and well-developed sourcing network has been cycle-tested and is designed to deliver consistent, opportunistic returns while minimizing losses.