Westcore and DRA buy Silicon Valley Portfolio for $250MM

Westcore, DRA Advisors, Silicon Valley, San Jose, Fremont, Northern California, Oakland, M West, DivcoWest, TPG Real Estate, Mission West Properties

Newmark Cornish & Carey, Santa Clara, Silicon Valley, Real Estate Review & Forecast, Phil Mahoney, Chuck Seufferlein
By Jon Peterson

San Diego-based Westcore Properties and New York City-based DRA Advisors have paid close to $250 million or $135 per square foot to acquire a 1.7 million square foot of industrial and R&D buildings in Silicon Valley from south San Jose to Fremont, according to sources that are aware of the transaction.

[contextly_sidebar id=”v1VsPbCoIZdqkGXffSXeSkckb1JpQ7BX”]Westcore declined to comment on the financial terms of the transaction when contacted for this story.

The joint venture with Westcore and DRA is structured with 20 percent of the ownership going to Westcore and 80 percent to DRA.

“We think that the pricing we achieved on this portfolio purchase was very attractive when you compare it to other deals that have occurred in the marketplace this year. We look forward to making improvements to the assets that we bought going forward,” said Peter Mette, director of acquisitions for Westcore in Northern California and the Pacific Northwest. He works out of the company’s regional office in Oakland at 1221 Broadway. Industry sources have indicated that replacement cost for the kinds of assets that the venture bought are around $200 per square foot.

There are a total of 25 buildings in the portfolio that the venture acquired. The overall occupancy of the portfolio is 81 percent. “If you take out the one property that has no tenants then the total occupancy is around 89 percent,” said Don Ankeny, president of Westcore Properties. The goals with the portfolio are either to lease up the empty space or to re-lease the space when the existing leases come up for renewal.

The one asset he is talking about is the 75,000 square foot property located at 6320 San Ignacio in North San Jose. “This is a property that has been for around eight years. We feel very good about our ability to get this asset leased up at a market rate at some point in the future,” said Ankeny.

The seller of the portfolio was M West Property Company based in San Jose. This company had held these assets for three years as part of its major acquisition of Carl Berg’s Mission West Properties portfolio. M West has major institutional investors as its capital sources, which include DivcoWest and TPG Real Estate.

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