By Jon Peterson
A three-company joint venture has come together to acquire the 127,000 square foot 5301 Patrick Henry Drive office/R&D facility in Santa Clara. The purchase price was in the ballpark of $150 per square foot or around $19 million, according to sources familiar with the transaction.[contextly_sidebar id=”jz1oW8jTco1IWGCKDFmdfVopjvtPgu1L”]The companies involved in the joint venture are Chicago-based Kinship Capital and Pearlmark Real Estate Partners as well as San Mateo-based Insight Realty Company. Kinship declined to comment on the acquisition price due to a confidentially agreement.
The property is now vacant. The new owners are looking at spending in the neighborhood of $100 per square foot to make improvements to the property.
“We think that we will be creating new space that many tenants will be interested in. These will be very open collaborative spaces that technology tenants are now looking for in today’s marketplace. A new lobby at the property will also be put in,” says Nick Thomson, a principal with Kinship Capital.
The leasing efforts on the property going forward will be overseen by Jeff Arrillaga, a senior vice president with Newmark Cornish & Carey in its Santa Clara office.
“We believe that the technology companies from software development, Web commerce, social media and even hardware R&D will value the open and creative space this building will offer. This kind of space is very hard to come by. With clear heights of 12 feet to 25 feet, only major companies have built this kind of space for themselves,” says Arrillaga.
The seven-acre property has been vacant for around nine months when Abbott Labs moved out of the building. The renovation of the property will include the new space having a parking ratio of 3.5 spaces per 1,000 square feet.
5301 Patrick Henry could offer the type of space that seems to be of higher demand in the Valley. “This type of space has less vacancy than the overall vacancy rate for the Silicon Valley. Rents for the new space being created have grown faster than rents in the overall market,” said Arrillaga.
These new rents have not been determined at this time. The space will remain un-priced until the renovation of the building is near completion, stated Arrillaga. The delivery of the finished product is expected to happen in 2016.