 |
Shorenstein Kicks off 7th Fund with Silicon Valley Buy
By Jillian S. Ambroz - Commercial Real Estate Direct
March 24, 2005 - Shorenstein Co. has kicked off its seventh investment fund with the purchase of a Santa Clara, Calif., office building for $70 million, marking the company's first Silicon Valley asset.
The San Francisco-based firm has agreed to buy the 282,000-square-foot building known as the WebEx tower.
Shorenstein will tap into Shorenstein Realty Investors Seven LP to fund the transaction. The fund raised $775 million of equity, giving it a buying capacity of about $2.2 billion.
The acquisition fits Shorenstein's model of acquiring value-add office buildings. The property, at the intersection of U.S. Highway 101 and Great America Parkway, is about 80 percent leased. The deal is expected to close by month's end.
It is being sold by a joint venture between Divco West Properties' Page Mill Properties fund and Westbrook Partners. The venture paid about $32.8 million for what was then a vacant and incomplete property that was formerly known as Mission Towers Two in 2003. It was estimated at the time of the purchase that the Divco partnership would have to invest about $5 million to complete construction of the building.
PMC-Sierra had purchased it in order to get out of a hefty lease that would have required a total of $215 million of rent through 2011. The high-tech company purchased it from Tishman Speyer Properties and quickly resold it to the Divco/Westbrook team.
The building's latest name is the result of WebEx Communications Inc. occupying about 161,000 sf of the building as its world headquarters under a 10-year lease inked last May.
The transaction is notable for Shorenstein, which has been one of San Francisco's biggest players. Before a selling spree last year, the firm owned 6.5 million sf of class-A office space in downtown San Francisco.
It sold, for $380 million, its 50 percent stake in the 1.8 million-sf Bank of America Tower. It also sold Hills Plaza, a 609,000-sf property, for $198 million. Shorenstein now owns about 2.2 million sf in the city.
Among its Bay Area holdings: Oakland City Center and U.S. Bank Plaza in downtown Sacramento, bring the portfolio to about 3.8 million sf for the area.
|
