By Meghan Hall
A new office building slated for delivery within the next few weeks has sold to a Chicago-based investor as office investment across the Bay Area picks up pace. In a transaction that closed at the end of last week, Stanford University sold 3380 Coyote Hill Road to HSRE Coyote Hill Owner, an affiliate of Harrison Street, for $123 million.
The 85,400 square foot office building is expected to be completed before the end of the year, according to The Mercury News, who first reported the transaction. Capital One National Association provided Harrison Street with a $69.5 million loan for the transaction. The property has been leased to VMware, a publicly traded software company based in Palo Alto, Calif.
As is typical for transactions within the Stanford Research Park, Stanford has retained ownership of the land beneath the building. Stanford has provided Harrison Street with a ground lease for the property.
The building will feature expansive windows and prioritize light and air flow. It has been designed by STUDIOS Architecture, who has also completed work on a number of other buildings within the Stanford Research Park, including 1450 and 1701 Page Mill Road.
“Tucked into its hilly site in the southwestern portion of the Stanford Research Park, the new building backs up to scenic Coyote Hill, offering both sweeping views and a sense of privacy for tenants,” states STUDIOS of the 3380 Coyote Hill Road project. “…Floor-to-ceiling glass along most of the north façade and large saw-toothed skylight in the center of the building bring in bright natural light deep inside.”
Office properties within Silicon Valley continue to attract investors, thanks in part to the stability of the life sciences and tech industries. This past fall, Alexandria Real Estate Equities purchased 3181 Porter Drive. Also located within the Stanford Research Park, the 99,415 square foot asset is leased to Jazz Pharmaceuticals. Alexandria paid $115.2 million for the property. Santa Monica-based Miramar Capital paid $54.5 million for a 129,000 square foot complex on Stevens Creek Boulevard. While price discovery remains tough for many in the industry, strong fundamentals pre-COVID-19 and the relative stability of vacancy and rental rates have proved a boon for investors.