Silicon Valley Office Complex Gets $118M Refi
Timing for the mass return to the office remains uncertain, but the owners of a Silicon Valley office complex and their lender showed commitment to the sector with a nearly $120M refinance last month.
Angelo Gordon and SteelWave closed on a $118.2M first mortgage and mezzanine refinance of Hamilton Plaza, a two-building, six-story, more than 354K SF office complex at 900 and 910 East Hamilton Ave. in Campbell, the lender, ACORE Capital, announced.
Among the tenants in the complex, which was built in 1989, are online dating company FriendFinder Networks, several technology and telecommunications companies like Syniverse Technologies, and a pediatrician, according to Reonomy. ACORE Capital Senior Managing Director and co-Head of Originations Kyle Jeffers told Bisnow the complex’s proximity to transportation and shopping center The Pruneyard made the refinance an attractive deal to the lender.
The Silicon Valley office market has more than held its own during the coronavirus pandemic, even though the bulk of its tech companies embraced remote work. Its 11% office vacancy in the first quarter was the best of more than 50 metro regions studied by JLL, Bloomberg reported. The region’s vacancy rose in the second quarter, but so did new leasing volume, CoStar reported.
The nationwide return to the office has careened into a state of flux with the rise of coronavirus cases caused by the virus’s delta variant. Apple, which signed Silicon Valley’s largest lease of 2021, was one of the first big companies to delay its return-to-office date. It was followed swiftly by fellow Silicon Valley and San Francisco Bay Area occupiers Google and Twitter.
But the area’s fundamental office projections were strong enough for ACORE to close on the Hamilton Plaza refinance.
“If you believe in the area and the demographics of Silicon Valley, if you believe in things long-term, then you kind of look past the immediate effects of the pandemic and really look three, four, five years down the road and still feel really happy and really positive about where Silicon Valley’s going to be in the long term,” Jeffers said.
The refinance is a 60-month loan. ACORE declined to disclose further terms of the financing, which was brokered by Eastdil Secured.