By Jon Peterson
Irvine-based Muller Company and Cigna Investors have closed on the acquisition of the 103,622 square foot Century Plaza office building located at 550 South Winchester in San Jose. The purchase price was $612 per square foot ,or $63.4 million, as stated by multiple sources familiar with the sale of the property.
The seller of the 80s-vintage property was New York Life Real Estate Investors, which did not respond to a phone call seeking comment for this story. The company had owned the property for some time, for 12 to 13 years. Both the buyer and seller of the property were represented by Cushman & Wakefield. Those involved in the sale included Eric Fox, executive managing director in the San Jose office, along with Steve Hermann, Seth Siegel and Adam Lasoff in the firm’s San Francisco office. Cushman & Wakefield declined to comment on the sales price of the property.
There will be some opportunity for the new owners to add value to the property in the future. When the asset was sold, the vacancy on the property was 82 percent. “There was very strong interest in the property as we went through the sales process. I think a variety types of investors were interested in the property given a chance to add value to the asset going forward by leasing up the empty space, and that the rents in the property were below market. The asset does have a very strong location, as it’s located very close to the Santana Row shopping center, which is a nice amenity to have for the employees of the tenants in the office building,” said Fox.
“We saw an opportunity to acquire a well-located property that would allow us to add value by executing a strategic business plan to reposition the asset as a first-class office destination,” said Jon M. Muller, a principal with The Muller Company in a statement. “The ownership plans to rebrand the property and invest approximately $4.1 million to upgrade the façade, landscaping, lobby, restrooms and corridors in order to maximize rents and create a modern Class A office building in the heart of Silicon Valley and steps away from Santana Row, San Jose’s renowned outdoor lifestyle and retail destination.”
“The Muller Company has been in the Santana Row market for close to 20 years and is excited about the continued growth and area amenities, which includes Westfield Mall’s Westfield Valley Fair, a $1.2 billion retail investment and Federal Realty’s continued commitment to Class ’A‘ office product with over 550,000 SF in Santana Row,” Muller added.