By Jon Peterson
San Francisco-based Swift Real Estate Partners is in the process of buying the 384,000 square Results Way office asset in Cupertino. The potential purchase price on the transaction is approximately $350 million, or just around $910 per square foot, according to multiple sources familiar with the sale of the property. The transaction has not closed at this time.
Swift and its president and founder Christopher Peatross declined to comment on this transaction when contacted for this story. This possible acquisition for the real estate investor would be among the largest deal the company has ever worked completed.
The seller of the asset is New York City-based DWS Group, which used to be known as RREEF. This property owner had put the asset up for sale in August of this year. At the time, the potential sales price on the property was thought to be somewhere in the neighborhood of $320 million, according to sources that track the sale of office buildings in Silicon Valley.
DWS has been the owner of the office asset for nearly seven years. The real estate investor had paid $165 million for the property in December 2013, according to public records. The listing agent on the sale is the Silicon Valley office of Eastdil Secured, which has a San Jose office led by Greg Cioth, managing director, as stated on the company’s website.
The Results Way campus is located at 2 to 16 Results Way in the city of Cupertino, and it is comprised of 10 buildings, all of which are leased to Apple. This tenant’s lease does not expire until November 2029 and included in the lease are annual rent increases of three percent.
The potential transaction is similar to others that Swift has executed over the past few years. The properties that this investor buys usually include a value-add opportunity, which is the case with this asset, as well. In this case, there is the possibility of adding an additional 100,000 to the asset in the future, according to industry sources.
Apple is by far the largest tenant in the Cupertino market for office and R&D assets, and this Silicon Valley city is its home. The company owns or manages 53 buildings in the region totaling nearly 7.8 million square feet. These assets amount to 81 percent of the total office/R&D space in Cupertino. This market remains very tight with a vacancy around 1.45 percent as of the end of the second quarter of this year.