By Jon Peterson
Menlo Park-based Sand Hill Property Company and Washington, D.C.-based-based The Carlyle Group have placed the new Netflix Headquarters Campus office building in Los Gatos on the market for sale. The sellers of the property have awarded the listing of the property through the Menlo Park and San Francisco offices of JLL. Those involved in the sale are Erik Doyle, Will Connors, Michael Seifer and Rob Hielscher.[contextly_sidebar id=”07aDiDPPMMK0050rdcW7lgSZnIIxqyQv”]Since 2010, less than ten buildings over 100,000 square feet in the San Francisco Bay Area have been sold within three years of being constructed, according to sources that track this information. It’s anticipated that the two buildings will sell for a premium.
“This is a property that we think will attract very strong buyer interest, including some foreign capital sources. It has a lot of attributes that investors are looking for like a very strong location, a brand new property and an asset that is leased to a strong tenant for a long time that will produce sustainable income,” says Doyle, a managing director with JLL in its Menlo Park office.
The lease that the tenant signed is a 10-year triple-net deal. The lease is projected to start in the second or third quarter of this year and run to 2025. Netflix was provided a standard tenant improvement allowance, but is planning to invest significantly more of its own capital in addition to the provided allowance.
Netflix signed its lease in 2013, prior to the start of construction when rates were much lower than they are today. “Whoever buys this will get the additional advantage of buying a below market lease,” said Doyle.
Sand Hill and Carlyle did not respond to phone calls seeking comment for this story. Construction of the property is in the process of being completed. This should be happening in the next 30 to 45 days.