By Jon Peterson
A private investor based out of Taiwan has purchased the 68,608 square foot office/R&D asset located at 1237 East Arques Avenue in Sunnyvale for $25.9 million, or just over $377 per square foot, as stated by sources familiar with the transaction.
The seller of the property was San Francisco-based Graymark Capital. Both sides of the sale of the property were represented in the transaction by the San Francisco and San Jose offices of Cushman & Wakefield.
“This property was sold as an all-cash transaction at the time it was completed. I would expect that the new ownership will put some debt on the property in the future. The cap rate on this sale would be in the high six percent range,” says Eric Fox, executive managing director with Cushman & Wakefield. He works out of the company’s office in San Jose and represented the seller in the transaction.
Graymark had paid $20.4 million for the property in 2016, according to public documents. There is a lease on the property with Sensity Systems, a company that helps owners improve lighting control and energy efficiency in their properties. The company is owned by Verizon. “The seller made the decision that after Verizon had acquired Sensity it would make sense to put the property on the market for sale,” said Fox.
The current lease on 1237 East Arques has another five years left to run. There is around 10,000 square feet in the property that is currently sub-leased. The asset is split up with around 70 percent of the space comprised of office space and the balance used as research and/or lab space.
Graymark Capital is a real estate investment firm based in San Francisco that invests in commercial property throughout the West Coast. The company has acquired 1,550,000 square feet of institutional quality property valued at over $500 million over the last 5 years, according to the company’s web site. Its offices are located at 222 Kearny Street in San Francisco.