By Jon Peterson
A joint venture of Westport Capital Partners and San Francisco-based Cannae Partners has bought the seven-building 466,000 square foot Oak Creek Business park in Milpitas for around $80 million, or just over $171 per combined square foot, according to sources that were aware of the transaction details.
Eric Clapp, who works in the Los Angeles office of Westport Capital, did not respond to several phone calls for this story. Cannae Partners also declined to comment for this article.
The seller of the property was I-Star Financial. They were represented in the transaction by the San Jose and San Francisco offices of Cushman & Wakefield and San Francisco-based Davies Commercial Real Estate. The listing agents include Eric Fox and Steve Hermann of Cushman & Wakefield and Greg Davies Sr. of Davies Commercial.
The office complex is located at three different street addresses. These include 1565 and 1855 Barber and 1504 and 1530 McCarthy. The seller had owned the assets since 1998. The complex had been originally developed by Prudential in the 1980s.
The cap rate on the transaction was in the six percent range, as stated by sources that had followed the sale. This return is based on the current net operating income in the property.
The new owners should have the ability to increase the property’s income in the future. “The rents in the property now for much of the space are 35 percent to 40 percent below market. In some parts of the complex rents are as much as 50 percent below market. As leases come up for renewal, additional value could be created,” said Fox of Cushman & Wakefield. When the complex was sold, leasing stood at 93 percent.