By Jon Peterson
San Francisco-based PSAI Realty Partners has acquired the 175,000 square foot office asset secured by a ground lease in the Stanford Research Park located at 3420 Hillview Avenue in Palo Alto for $64 million, according to public records.
The seller of the property is the Electrical Power Research Institute. This entity was represented in the transaction by Colliers International through its Institutional Capital Markets unit. One of the people involved in the sale was Andy Zighelboim, an executive vice president. Colliers declined to comment when contacted about this story.
The seller did not did conduct a wide marketing plan on the sale of the ground lease, according to sources. It limited the potential buyers to investors that had previously invested in ground leases within the Stanford Research Park or had experience dealing with Stanford.
The ground lease at 3420 Hillview Avenue has only seven years left to run and there are no planned extensions with the University at this time.
The office property has two buildings. One of the buildings is leased to SAP, with the lease term that expires at the same time as the ground lease. The second building is about 50 percent leased to the Electrical Power Research Institute. The business plan for PSAI would be to lease up the other half of the second building.
The transaction in Palo Alto represents the second investment that PSAI has closed recently in the San Francisco Bay Area. In September, the company paid $50.75 million to acquired the 126,509 square foot office building known as The Atrium in Emeryville located at 1650 65th Street.