By Jon Peterson
Two San Francisco-based firms have paid $13 million, or $200 per square foot, to acquire the roughly 65,000 square foot vacant commercial building located at 3901 North First Street in North San Jose, according to sources familiar with the transaction.[contextly_sidebar id=”StRHodjEMzsNiEtgVOZd158xtg2blcFg”]The buyers of the asset are SKS Partners and ProspectHill Group. SKS declined to comment on the purchase price on the property when contacted for this story.
The seller of the property was a private individual. He had acquired the property from Telefunken Semiconductors America in April of 2014 for $7.25 million, or roughly $111 per square foot. The seller traded the asset with its listing agent, the San Jose office of Colliers International. The brokers involved in the transaction were Jeff Nochimson, executive vice president, and Howard Berry, vice president. “This property was vacant for that time, as the property was used for semiconductor space. The previous owner was not in a position to renovate the property. The asset was in a dire need for some improvements, which it will get now under the new ownership,” said Berry.
Nochimson and Berry will continue their involvement with the property as leasing agents going forward.
“This property has been an empty building for the past two years. We really like the location of the property and that after a renovation of the asset we should be able to attract tenants to the property. In this region there are now 20 single tenants who have same requirements that would fit our building. This market has been very strong with the recent renovated buildings having a current vacancy of low single digits,” says Dan Kingsley, a managing partner with SKS.
The new owners are expecting to start the renovation of the building next week. The projection is that the work will be finished by April of next year. Kinsley declined to comment how much additional capital the new owners will invest into the property above the purchase price of the asset. The work on the asset will include a new glass lobby, urban, SOMA-style interior improvements, a vibrant outdoor courtyard, new landscaping and several electric vehicle charging stations.
PCCP, LLC announced that it had provided a senior loan to ProspectHill and SKS for the acquisition and complete renovation of a single-story office/R&D building. “This loan provides PCCP with the opportunity to capitalize on the continued strength of the Silicon Valley office market by executing a proven business plan with an experienced borrower,” said Erik Flynn, managing director with PCCP in a prepared statement. “Once repositioned, this asset is poised to capitalize on the transformation of north San Jose into not only a hub consisting of major technology employers, but also an environment where employees can live, work and play.”
The property could become either 100 percent office or an R&D facility. “There [are] 7,000 rams of power in the property now with the potential to add another 4,000 rams of power. The building could become either a single- or multi-tenant asset in the future,” said Kingsley.
3901 North First Street has several amenities in the area that could attract a number of tenants. It’s within a two-minute walk of a VTA Light Rail stop. It’s approximately just as far from the @First Retail Center anchored by Target and features a wide range of dining and service amenities as well as Hyatt and Marriott flagged hotels.