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Twin Seaport Assets Flip for $240M Plus
By Brian K.
Miller - GlobeSt.com
Wednesday, April 18, 2007 - REDWOOD
CITY, CA-Locally based Shorenstein Properties LLC has acquired 1400-1500
Seaport Blvd., a pair of connected five-story buildings here for somewhere
between $240 million and $250 million, local industry sources tell
GlobeSt.com. Completed in 2002, the 447,747-sf development is 100% leased
to PDL Biopharma, a biopharmaceutical company that plans to relocate
its headquarters and other operations to the buildings later this year
from Fremont.
The two buildings are part
of the 10-building, 1.7-million-sf Pacific Shores Center, a multi-tenant,
106-acre campus with the amenities of a high-end corporate campus such
as Nike's in Beaverton, OR. The seller, Starwood Capital Group of Greenwich,
CT, acquired the overall development from Jay Paul Co. for $825 million
or $485 per sf shortly before the start of the year and immediately set
out to flip 1400-1500 Seaport, the core nature of which doesn't mesh
with Starwood's opportunistic strategy.
PDL has committed to lease the two buildings through
December 2021. The 164,000-sf building at 1500 Seaport was in shell condition
when PDL signed its lease. It is being built out as lab space. The 283,000-sf
building at 1400 Seaport, which is being subleased from OpenWave Systems
for the first seven years, was already finished and fully furnished and
will be used for PDL's administrative offices. The published triple-net
asking rate for 1500 Seaport at the time the lease was signed was $21 per
sf per year.
Starwood Capital's acquisition of Pacific Shores
Center included additional development land. Given that, the long-term
nature of PDL's lease and the fact that other buildings in the deal were
not fully leased, local industry experts tell GlobeSt.com that 1400 and
1500 Seaport were likely valued at well more than $500 per sf for Starwood
Capital's acquisition and that Shorenstein's flip price likely came in somewhere
between $540 and $550 per sf. The various parties involved either declined
comment on the price or could not be reached for comment.
Shorenstein
Properties LLC acquired the two buildings for its eighth investment fund,
formed late last year with $1.1 billion in committed capital. Shorenstein
represented itself in the transaction. Cornish & Carey and Eastdil Secured
represented Starwood.
Backing up to 135-acres of restored wetlands, Pacific
Shores is a multi-tenant, 106-acre campus with the amenities of a high-end
corporate campus such as Nike's in Beaverton, OR. The campus includes
a 38,000-sf fitness facility with a 25-ft rock climbing wall, a game room
and a lap pool, among other things. Additional amenities include baseball
and soccer fields, indoor and outdoor volleyball and basketball courts,
jogging and biking trails, high-end food service, a day spa and on-site
dental service. |
