W.P. Carey Buys Velodyne Lidar’s San Jose HQ for $51.4MM

By Meghan Hall

Commercial buildings with stable tenants are continuing to attract investor interest. In a deal that recently closed, New York-based W.P. Carey has purchased Veoldyne Lidar’s headquarters for $54.1 million. W.P. Carey purchased the item in an all-cash deal according to The Mercury News, who was the first to report the transaction. 

The seller was Hellyer-DMHall Properties, an affiliate of David Hall, the founder of Velodyne Lidar. According to public records, Velodyne Lidar purchased the property, located at 5521 Hellyer Ave. in South San Jose,  in December of 2016 for $23.44 million.

The property operates as one a “megafactory” for VelodyneLidar, which specializes in Light, Detection and Ranging (LiDAR) technologies. The company announced its expansion into the space as it ramped up production of 3D sensors to meet global demand. According to a statement made by the company at the time, Velodyne Lidar selected the location not just due to its size, but also because of its proximity to a highly educated workforce.

Velodyne Lidar initially signed a five year lease in 2017 and then subsequently agreed to a five year extension of the original contract. The rental agreement is expected to continue through 2027.

Silicon Valley’s commercial real estate sector is expected to recover as vaccination becomes more widespread. By the end of the first quarter, 40 percent of Santa Clara County residents had received at least one dose of the COVID-19 vaccine, and Governor Newsom’s plans to open the state by June 15 have bolstered activity. 

While leasing volume in the R&D sector declined by 28 percent at the beginning of the year, local experts are optimistic.

“Corporate real estate strategies have begun to take shape, as evident by an increase in tenant requirements and touring activity,” notes a first quarter report by brokerage firm CBRE. “…All signs point to this being the trough as nearly all the regions’ top R&D occupiers lay out upland for their employees to safely return to the workplace and revive the Silicon Valley commercial real estate market.

CBRE also emphasizes that investors were extremely active during the first quarter, due to successful large cap tech firms and strong debt markets. Assets with long-term leases will also remain attractive, and investors of all shapes and sizes are expected to continue pursuing opportunity in the market.

West Coast Commercial Real Estate News