By Meghan Hall
At the heart of Silicon Valley, Sunnyvale remains one of the tightest office markets in the San Francisco Bay Area, with both investors and tenants keen on snapping up space. However, Belmont, Calif.-based Embarcadero Capital Partners has posted the Oakmead Terrace office complex, located at 1230-1290 Oakmead Parkway up for sale. According to sources within the industry that track the regional office market, the 164,861 square foot property could fetch up to $55 million, or about $334 per square foot, in pricing.
According to a marketing brochure by Newmark Knight Frank advertising the complex, Oakmead Terrace is an “exceedingly rare” investment opportunity, and the four-building site would offer future investors the ability to create a best-in-class office project. The buildings sit on 7.93 acres, and while originally built in 1979, were updated this past year. The building’s floorplates are roughly 12,000 square feet in size.
Public documents indicate that Embarcadero Capital Partners purchased the property in November 2016 for $12.7 million from Portola Valley, Calif.-based Pollock Financial Group.
Additionally, the property is within close proximity to several of the region’s top tech tenants. Located just off of the 101 Freeway and the Lawrence Expressway — two major thoroughfares — Apple, Applied Materials, Google and others are all located nearby. The tech industry continues to drive the Sunnyvale tech market, with the city’s availability rate at just 1.75 percent, the second lowest in Silicon Valley. Only Cupertino, whose Class A vacancy rate is 1.1 percent, is lower. According to Newmark Knight Frank, Sunnyvale makes up 18 percent of all Silicon Valley requirements and is currently the most in-demand submarket in Silicon Valley, with 45 tenants seeking some 1.8 million square feet. In Sunnyvale alone, there are 300,000 square feet of small to medium block space requirements, spurred on by local and growing tech tenants.
As companies continue to grow within Sunnyvale, numerous multifamily development projects have been proposed or are under construction, in an effort to provide housing amidst the city’s job growth. Four sizeable developments are currently in the works within close proximity to the site: Lawrence Station, Lakeside Summerhill Nuevo and The Vale. Lawrence Station, a master-planned community, is the largest; when complete, the 72-acre development will include 3,500 multifamily units, 100,000 square feet of retail and 6.3 acres of public open space. Summerhill Nuevo is also sizeable, with 988 multi-family units and 40,000 square feet of retail, along with a 4,000 square foot community center included in the plans. Landsea’s The Vale will offer 450 units on 24.5 acres, while Lakeside will include 250 units, a 263-key hotel and public lakefront open space.
Embarcadero Capital Partners owns commercial real estate properties throughout California, with a current portfolio that encompasses 3 million square feet in 35 buildings, according to the firm’s website. The company also owns 475 Oakmead Parkway in Sunnyvale, a 57,000 square foot office building, Embarcadero Capital Partners also owns 488 Almaden in San Jose, a 379,000 square foot high-rise office building.