Medical Office Building Acquisition in Sunnyvale has Future Condo Plans

Los Aromos Development Sunnyvale Cherry Chase Medical Center Intero Commercial San Jose Fremont Jim McArthur Yuan Chang Malatesta Aveni Trust

By Jon Peterson

Los Aromos Development LLC has ideas of turning a medical office building that it has acquired in Sunnyvale into a for-sale condominium residential project in the future. The property that it acquired was the 11,192 square foot property located at 665 South Knickerbocker Drive. The property goes by the name of the Cherry Chase Medical Center.

“I think that on a long-term basis the new owners are planning to turn the property into for-sale condos. Should this happen it would end up being somewhere in the range of 30 units,” says Jim McArthur with Intero Commercial in San Jose. He and Yuan Chang represented the seller of the property. This was the Malatesta Aveni Trust. It had owned the property for 50 years. The asset was developed in 1957.

The sales price on the property was $6.75 million. The cap rate on the transaction was 3.5 percent. This return is based on the current income being produced by the property. The property had a total assessed value of $2.05 million in 2015.

The asset has a total of 15 medical suites, and two of the suites are now vacant. There are 50 parking spaces on site, as well. All the tenants in the property now are associated with the medical profession. The existing income in the property will allow the new owner to take its time to get the site approved for its future use, which could take as long as three years.

The Cherry Chase property is located within the Fremont Union School District. Within a five-mile radius of the property there is an average household income of $140,368 and the average age for the population for the area is 39.10.

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