A fund managed by Morgan Stanley Real Estate Investing acquired a 189K SF research and development facility in Milpitas in an all-cash transaction totaling $84.1M.

The two-story building on 9.7 acres at 601 McCarthy Blvd. was renovated in 2017 and is solely occupied by KLA Corp., a global supplier of advanced inspection tools, metrology systems and data analytics used in semiconductor manufacturing. KLA leased the R&D facility in 2023 to expand its footprint near its global headquarters at 3 Technology Drive, and it recently extended its lease through 2037.

KLA made significant capital improvements in the property, such as upgrading power capacity to 6,000 amps and expanding data center infrastructure capabilities, JLL said in a press release.

“This transaction represented a compelling opportunity for investors seeking long-term, credit-quality cash flow in the heart of Silicon Valley's semiconductor hub," said JLL Senior Director of Capital Markets Daniel Renz, who was on the team representing the seller. "KLA's recent lease extension and substantial capital investment into 601 McCarthy underscore the property's strategic importance to their operations and the critical role Milpitas plays in supporting the semiconductor industry's growth.”

The building at 601 McCarthy is in the heart of Silicon Valley’s Golden Triangle, a tech, semiconductor manufacturing and R&D hub bounded by Highway 101, State Route 237 and Interstate 880. Investor interest in industrial properties in the area has soared in recent months as vacancy dwindles.

Industrial leasing in Silicon Valley totaled 2.5M SF in the second quarter of 2026, led by advanced manufacturers Supermicro, which took down four buildings totaling 714K SF at Bridge Point San Jose at 2350 Qume Drive, and Archer Aviation, which leased five buildings spanning 501K SF farther south at Trammell Crow's Cochrane Technology Center campus in Morgan Hill, JLL reported.

Vacancy among Milpitas industrial properties in Q2 was 1.9%, while Fremont stood at 2%, researchers at Colliers reported. Investors have pumped hundreds of millions in investment capital into the area in a slew of recent transactions.

In early September, a joint venture led by Lone Star Funds spent nearly $650M to acquire a 2M SF portfolio encompassing 50 buildings in San Jose, Santa Clara and Milpitas. In mid-September, Galvanize Real Estate paid $94M for a four-building portfolio in Milpitas spanning 302K SF, while Bridge Logistics acquired a 198K SF industrial building at 45101-45169 Industrial Drive in Fremont, the Silicon Valley Business Journal reported.