January 7, 2015

Bisnow Scoop: Freedom Circle Sale

Bisnow's market sources tell us Irvine Co is getting ready to buy Legacy Partners' Tech Park at Freedom Circle. And Legacy made out like bandits on the flip.

The trade comes less than two years after Legacy shelled out about $100M to buy the 12-building site, which consists of 427k SF. Irvine and its chair, Donald Bren--the richest man in US real estate--have been dropping some serious dough in Silicon Valley as of late, include a big deal in Sunnyvale (details later). Our sources are still waiting on details about this Santa Clara sale, but they are hearing pricing is likely more than $300/SF. If that's accurate, Legacy would make a cool $28M profit.

The park consists of single- and two-story office buildings at 2518-2560 Mission College Blvd and 3910-3990 Freedom Circle. It's just the latest in a flurry of buys from Irvine, which is continuing to bolster its portfolio near Levi's Stadium. It also picked up the 31-acre Park Square office park in 2013.

  Share: Email Facebook Twitter LinkedIn  
Bisnow (RawSpace-Crowd) REC
Swinerton (BuildBright) SV
Arch Dimensions (video) SV

Top stories on Bisnow.com

In 2014, U.S. Renters Paid $441 Billion in Rent Hessam Nadji: Top US Residential Markets for 2015

Why San Jose is the New Place To Be

When Cara Douglas started working in the San Jose economic development office two years ago, downtown had fewer than 80 high-tech companies; now there are 110. With that growth, the city is getting ready to launch a brand-new campaign to drum up interest. Cara, the brains behind the project, tells us brokers and developers have been craving more ways to market San Jose, including a collateral suite of materials, and the new website launching at the end of the month will include Loopnet features and the ability to search for development opportunities and demographics. The office projects 40% growth by 2040.

We also chatted with economic development office downtown manager Lee Wilcox, who filled us in on San Jose's new high-rise development incentive approved at the end of 2014. Developers that build downtown's next office skyscraper can save up to $1.5M in fees for a project. He thinks interest will start ramping up in a few months, as vacancy still needs to come down and rents need to come up.

Downtown is already seeing lots of high-rise residential development (the 396-unit Centerra project recently topped off) and the city team thinks adding high-rise office space is crucial for balancing out the number of jobs and residents. The office claims one in four of Apple's employees live in San Jose vs. one in eight in S.F. Above, the view from the eco devo office's 17th floor; somewhere out there is Samsung's new HQ rising by the day.

San Jose's got about 100M SF of office, R&D and manufacturing space, with a citywide development capacity of more than 200M SF. That leaves a lot of room for shovel activity. Here's a sneak peek at a brochure the office will be circulating.

Last night San Jose welcomed new Mayor Sam Liccardo at the sold-out inauguration at the Center for the Performing Arts. Cara says the fourth-generation local should be good for bringing new business to San Jose. The four-mile circumference around downtown contains a whopping 50% of San Jose's population, so she hopes to market that radius. Sam is calling San Jose the new "global gateway" to the US.

  Share: Email Facebook Twitter LinkedIn  
Bisnow (video-blue)
CohnReznick (Field) SV
Bisnow (Niche-White)

Sunnyvale's (Already) The Next Big Thing

Irvine Co is on a roll, having just scooped up five office and R&D buildings totaling 113k SF in the Peery Park submarket, and Bisnow's market sources tell us the trade was at $350/SF. The seller of the 95% leased portfolio was Arden Realty, repped by CBRE. Heavy-hitter neighbors: Google, Apple and LinkedIn. With tech giants like that acquiring/leasing space, and firms like Irvine buying blocks of properties, the opportunities for tenants and investors are quickly diminishing.

Irvine's already got an existing Sunnyvale portfolio nearby, and this expansion is part of a long-term investment in Silicon Valley. The buildings sit at 323 N Mathilda, 755 N Mary, 617 Palomar, 720 Palomar and 840 Del Rey and range from 20k SF to 33k SF. Our sources say tenants and investors looking for space in Silicon Valley will be pushed further south. Yahoo's Sunnyvale HQ, above.

Tell Us

What do you hope the San Jose mayor accomplishes in his first year? tierney.plumb@bisnow.com