By Jon Peterson
Campbell-based South Bay Development Company has sold a 72,249 square foot office building located at 2030 Fortune Drive in San Jose for $17.7 million or $245 per square foot. The buyer of the property is H5 Data Centers. This company did not respond to phone calls seeking comment for this story.[contextly_sidebar id=”ddde55aef86c72a43e6bb7ea73b26ee6″]Both the buyer and seller were represented in the transaction by Cassidy Turley Commercial Real Estate Services. The brokers involved in the deal were Eric Fox, principal, Sutton Roley, principal and Nick Lazzarini, senior vice president. They all work in the firm’s San Jose office. Fox declined to comment when contacted for this story.
The property, which has some interesting aspects to it, was a good match for a data center service provider. “This property is an office building that has a data center component to it. This made it a little different than your typical data center property. I think this is why the price is a little high if you compare it to other data center assets. Most data center properties in the area have been trading for somewhere in the range of $80 to $120 per square foot,” says Dave Andris, a vice president with South Bay Development.
The seller had been involved with the property for past 18 months. They had been asked to work on the property on behalf of the property’s lender, which Andris declined to name. Prior to that ownership, the property had been owned by San Diego-based Westcore Properties before it ran into some financial difficulties during the economic downtown, according to Andris.
The property has now rebounded nicely, and it is now 100 percent leased. In August of last year, the landlord added Verizon to the rent roll for a 10-year lease that covers 35,147 square feet of the property, according to Andris.
H5 Data Centers is a company with a national footprint. The property in San Jose will be its first property that it owns in that market, according to its Web site. The company currently owns properties in other markets like San Luis Obispo, Seattle, Atlanta, Charlotte and Denver.
The company can invest in data centers in a variety of financial structures. These include build-to-suits, ground lease, sale/leasebacks, wholesale data centers and power shell data centers.