Just roughly two months after Seattle-based Washington Holdings spent $60 million buying a six-building office portfolio in San Jose, the company made another bold move in Silicon Valley acquiring the eight-building Montague Oaks Business Park located at 611-697 River Oaks Parkway. The 268,000 square-foot property sold for nearly $336 per square foot, according to a report from the Silicon Valley Business Journal, which represents the third time this property has traded since 2011. According to CoStar, Eagle Ridge Partners and CarVal Investors purchased the property from Prudential Real Estate Investors and McCandless Management Corporation in July of 2011 for $39.5 million. Three years later, the asset traded to San Francisco-based PSAI Realty Partners for $50.5 million, according to public documents, and now a third trade three years later brought the sale price to $90 million.
The per square foot pricing is higher than what Washington Holdings paid for the San Jose location in August, which could partially be due to the fact that Washington Holdings does not intend to make many changes to the Montague Oaks Business Park. PSAI invested some money to upgrade the property in the last three years, and Washington Holdings does not intend to conduct major upgrades, according to a statement made to the Silicon Valley Business Journal.
The property is 100 percent leased.
Washington Holdings’ other purchase was for the North First Street Corporate Center in San Jose located on Daggett Drive between North First Street and Zanker Road. That property, which is nearly 250,000 square feet, is just shy of 90 percent occupied, and the company paid approximately $240 per square foot to acquire it.
The company is working on an extensive renovation of the buildings, similar to the repositioning efforts the company did at its Mission Park asset. “We have a similar plan like we did with with Mission Park at Zanker Road. Total repositioning of the asset, we’ll make upgrades to the entries and the overall project,” said Casey Holt, vice president and general manager of Washington Holdings in Santa Clara at the time of the acquisition.
The company has engaged the San Jose-based Studio G Architects and is working on the designs with the firm already. Studio G has made a name for itself in repositioning commercial properties across Silicon Valley, and aside from working with Washington Holdings on this and their pervious project, they also worked with the Bixby Land Company on their 288,000 square foot The Campus in San Jose, the Lane Partners redevelopment of Orchard Commons, a 313,000 square foot property in San Jose, as well as the Divco West’s Divco Trimble, a 206,000 square foot complex also in San Jose, amongst others.
Hold stated that the company is looking to start redevelopment construction on the Santa Clara project in the first quarter of 2018, with an expected completion date sometime in the third quarter of 2018.
Washington Holdings now sits on a Silicon Valley portfolio that is approximately 1.2 million square feet.