As 2021 was coming to a close, a number of deals in the fourth quarter provided a glimpse into how 2022 may be shaping up. In another example of properties with credit tenants selling relatively quickly, San Francisco-based Stockbridge Real Estate sold a San Jose property in October to LBA Realty for $76.5 million, according to public records. The 86,244 square-foot asset, located at 5300 Stevens Creek Blvd., traded for roughly $887 per square foot.
Stockbridge had acquired the property in June of 2013 and paid $41,750,000 for it at that time.
The distinctive 5300 Stevens Creek Blvd. office building sits on the border of San Jose and Cupertino and is visible from Interstate 280. The six-story building is among the most distinct in Silicon Valley, with black and brown window glass and upper floors cantilevered over a ground-floor plaza and supported by multiple concrete pillars.
Newmark’s Steve Golubchik, Jonathan Schaefler and Darren Hollak brokered the deal.
According to recent media reports the property has recently been fully leased to Apple. Most of the sales transactions over the past couple of years have resulted in favorable terms for the seller if the property is occupied by a high credit tenant on a long term basis, and this deal showcases those transaction trends, even as leasing across the region has yet to firm up.
According to a recent, Q4 2021 Silicon Valley Office Marketbeat report by Cushman & Wakefield, Silicon Valley’s office vacancy rate increased slightly in the last quarter of the year, finishing at 15.3 percent, up from the 15.2 percent rate in the third quarter, which translates to roughly 13.7 million square feet of vacancy. The average asking rent decreased slightly in the fourth quarter, stated the report, finishing at $5.35 per square foot on a monthly full-service basis from $5.37 in the third quarter.
However, not all parts of Silicon Valley are following these trends, rents continue to skew higher in the Menlo Park and Palo Alto submarkets due to their proximity to Stanford University and the concentration of prestigious venture capital firms along Sand Hill Road.