By Meghan Hall
SoftBank, a Japanese multinational investment firm, has come to an agreement with Stanford University and big-time developer John Arrillaga to lease 130,000 square feet in Menlo Park. The deal, first reported by The Mercury News, involves multiple buildings in Middle Plaza, a mixed-use development owned by Stanford University. The office buildings that are part of the project will be developed by Arrillaga and his business partner, Richard Peery.
Newmark Knight Frank Executive Vice Chairman Phil Mahoney and Vice Chairman Ben Stern worked to arrange the transaction and sealed the deal for the buildings two years before construction is anticipated to be completed in 2021 or 2022. The lease will come in at about $10 per square foot per month, making it one of the highest rental rates in the Bay Area to be recorded.
The 8.4-acre development, according to Stanford’s website, broke ground in August of this year and is located at 200, 300, 400 and 500 El Camino Real. In its entirety, the development features 145,000 square feet of commercial office space, 215 one and two-bedroom residential units and 10,000 square feet of retail space. A publicly accessible plaza will be located at Middle Avenue, as well.
According to a recent office report released by Newmark Knight Frank, leasing activity throughout Silicon Valley and up the peninsula continues to be driven by tech giants, and quality space remains difficult to find. So far this year, the leasing market has pulled in 1 million square feet of gross absorption and vacancy remained at 7 percent. In Menlo Park, where office inventory totals 5,519,892 square feet, the total availability rate sits at 8.42 percent. Class A properties in Menlo Park typically garner about $7.17 per square foot triple-net, in rents. Newmark Knight Frank believes that consistent leasing activity and economic fundamentals will continue to contribute to high rents and low vacancy throughout the remainder of the year.