By Jon Peterson
San Francisco-based Shorenstein Properties is going to be achieving a large gain on the sale of the 12-story, 283,135 square foot Cisco Tower office building located at 3979 Freedom Circle in Santa Clara.
The sales price on the property is around $470 per square foot or approximately $133 million, according to sources with direct knowledge of the transaction. Shorenstein had purchased the property in 2005 for around $70 million. The real estate investment firm declined to comment for this story when contacted.
The buyer of the 13-year-old property is Newark, N.J.-based Prudential Real Estate Investors. It did not respond to phone calls or e-mails in time for this article.
Although the tower is currently fully occupied, there will likely be significant space available for lease in the building at the end of 2014. Cisco, which is now occupying 165,000 square feet or 58 percent of the building, is planned to exit the building at the end of this year, according to sources familiar with the property. The San Jose-based tech giant is planning on consolidating its space into fewer buildings.
This property will be the second major deal for Prudential in Santa Clara in a short period of time. Earlier in the spring the insurance company also bought 3975 Freedom Circle in Santa Clara for $508 per square foot or $148 million. This asset was acquired from Chicago-based Equity Office Properties.
Shorenstein had bought the Cisco Tower for its commingled fund, Shorenstein Realty Investors Seven. The $775 million capital raise was completed in 2003. The real estate firm invested $75 million of its own capital into the commingled fund as a co-investment.
Shorenstein owns one other one asset in Santa Clara, according to its Web site. This is the 422,046 square foot Santa Clara Towers office building located at 3945 and 3965 Freedom Circle. The company owns other office buildings throughout the Bay Area. These are located in San Francisco, South San Francisco, Redwood City and Oakland.