By Jon Peterson
New York City-based TIAA-CREF has acquired the 133,000-square-foot Charleston Plaza shopping center at 2400 Charleston Road in Mountain View, accepting an initial yield, or capitalization rate, of approximately 5 percent, according to industry sources.
The seller was Redwood City-based Dollinger Properties, which built Charleston Plaza in 2006. At sale, the property was fully leased to tenants including Bed, Bath & Beyond, REI, PetSmart, Chipotle and Starbucks.
TIAA-CREF, the Teachers Insurance and Annuity Association-College Retirement Equities Fund, is a New York-based provider of retirement services to the academic, research, medical and cultural fields. It had $495 billion in assets under management at the end of last year.
TIAA-CREF declined comment but issued a statement saying, “The company continually looks to improve the quality of its portfolio with carefully identified acquisitions and select sales.”
Dollinger also declined comment citing a confidentiality agreement with the buyer.
The offering was made without an asking price. The lead investment advisors on the sale were Colliers International senior vice presidents Kevin Van Voorhis, Jay Gomez and James Kaye.
The property, which fronts U.S. 101, sits directly across the massive freeway from the sprawling Google Inc. headquarters campus. In-place one-year net operating income was $4.5 million. Colliers projected that 188,000 cars drive by the center daily. The center serves the communities of Menlo Park, Palo Alto, Los Altos, Mountain View and portions of Sunnyvale and Cupertino.
Besides Google’s campus, Microsoft Corp., Intuit Inc. and Symantec Corp. also have campuses nearby. The daytime work population varies from 16,700 within a mile’s radius to 188,300 within a five-mile radius.
“The property has added $200,000 in sales tax revenue to the city on an annual basis,” said Ellis Berns, economic development manager for the city of Mountain View. “It has helped us out a lot in these difficult economic times.”
The property is considered a core asset, given its age, occupancy and the quality of its tenants. Core assets are understood in the industry to be properties that are less than 10 years old and at least 80 percent occupied.
“The property was fully pre-leased prior to the start of construction. There were no rent concessions asked for by any of the tenants, and no vacancy occurred during the economic decline. I think these facts show how the asset has performed over the past few years,” said Van Voorhis.
Image courtesy of Hohbach-Lewin