By Nancy Amdur
Sand Hill Property Co. scooped up more pieces of Palo Alto’s desirable Stanford Research Park with the recent acquisition of an office building on Hanover Street and a nearby parking lot.
The purchase gave a Sand Hill joint venture the approximately 129,000-square-foot building at 3175 Hanover St., which is leased to esteemed law firm Cooley LLP. The building sits on 7.1 acres and is next to Hewlett-Packard’s offices. The purchase also included a 2.9-acre parking area at 3300 El Camino Real.
Sand Hill principal and founder Peter Pau confirmed that the company bought the assets from Fremont, Calif.-based Lam Research. The parking lot zoning allows it to be redeveloped for office use, but Sand Hill does not “yet have any plans for the vacant lot,” Pau said in an e-mail. A Lam spokesperson said the company, an equipment supplier to the semiconductor industry, sold the properties because “they were surplus assets.”
The sale price for the properties was undisclosed, but CBRE Capital Markets’ Debt & Structured Finance team announced that it arranged $86.5 million in non-recourse financing for the acquisition of the Hanover Street building. A Wall Street lender provided the financing.
“This was one of the most competitive financing situations I have seen in quite some time,” said John Nelson, an executive vice president in CBRE’s San Francisco office, in a statement. “The intense competition among lenders was a direct function of the strong location and tenancy of the prospect in addition to the excellent sponsorship.” Nelson, who arranged the acquisition financing, declined to comment further on the deal.
Representatives from Cornish & Carey Commercial Newmark Knight Frank worked on the deal. Howard Dallmar, an executive vice president at the firm’s Palo Alto office, declined to comment.
This marks the Redwood City-based real estate investment and development company’s second recent acquisition in the research park. Last year, Sand Hill bought the former Facebook office at 1050 Page Mill Road. The company is working to redevelop that 13.5-acre site into four two-story office buildings surrounding a large landscaped courtyard.
The 700-acre Stanford Research Park, founded in 1951, includes many other high-profile tenants, including Tesla Motors, Skype, VMware, Lockheed Martin and law firm Wilson Sonsini Goodrich & Rosati.
Employers like the park’s location, which is adjacent to Stanford University, because it helps recruit talent, according to local real estate brokers. Many of the park’s tenants also interact with the university’s researchers. The park is conveniently situated near Interstate 280 and Highway 101. A shuttle bus goes from the park to the nearby Caltrain stop at California Avenue, and bus service also is available.
Stanford University owns the research park and acts as a ground lessor for most property in the park, which contains 10 million square feet of research and development, office, manufacturing buildings and facilities. The park features 150 companies comprising about 20,000 employees, according to Stanford Research Park’s Web site.
Sand Hill is busy with many other projects underway. Last summer, The Registry reported that the company planned more than $600 million in Silicon Valley development. Among these projects are a mixed-use Cupertino development dubbed Main Street Cupertino, which will include office, retail and residential components along with a hotel and parking garage; a retail and residential mixed-use redevelopment of Palo Alto’s Edgewood Plaza shopping center at 2080 Channing Ave.; and an approximately 485,000-square-foot four-building Los Gatos office complex called The Grove (a redevelopment of the Los Gatos Business Park) at Albright Way and Winchester Boulevard, where two buildings have been pre-leased to Netflix, Inc.