Northridge Capital JV Closes $276M Acquisition in Silicon Valley

The Campus at Lawson Lane. Image courtesy of Northridge Capital

Northridge Capital LLC has recently partnered with Kuwait-based Kamco Investment Co. K.S.C (Public) on the acquisition of The Campus at Lawson Lane, an approximately 329,000-square-foot, Silicon Valley office complex in Santa Clara, Calif. The partners acquired the property, which is fully leased to software firm ServiceNow Inc., from the Sobrato Organization.

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Eastdil Secured’s Nate Jones orchestrated the sale on behalf of Sobrato. Neither buyer nor seller has publicly divulged the transaction price. However, a Silicon Valley Business Journal article indicated that The Campus traded for approximately $276 million. Silicon Valley is new territory for both Northridge and Kamco. “This market is ‘ground zero’ for a who’s who of technology firms in the U.S., and the deep pool of human capital available there will keep those companies tethered to that market,” David Jackson, president of Northridge Capital, told Commercial Property Executive.

The Campus at Lawson Lane. Image courtesy of Kamco Investment Co. K.S.C (Public)

Carrying the addresses of 2215 and 2225 Lawson Lane, The Campus consists of two five-story office buildings encompassing 155,000 square feet each and a three-story amenity building featuring a full-service cafeteria, fitness facility and employee gathering hubs. Sobrato completed development of the nearly 9-acre office destination in 2012, and the property sat vacant until 2014, when ServiceNow inked a lease of the entire complex for its global headquarters. Under the terms of the agreement, the tech firm will call the property home for at least an additional 15 years and it will have more elbowroom, as the approximately 300,000-square-foot Phase 2 of The Campus is currently underway.

Cross-border appeal

With the closing of The Campus purchase, Northridge and Kamco have now completed three U.S. transactions together. In April 2019, the partners acquired HP Plaza, a 378,400-square-foot Houston-area office complex that is 100 percent leased to HP Inc. Several months later, in November, Northridge and Kamco joined forces on the purchase of Centerstone at Tysons, a 150,000-square-foot office building located just outside Washington, D.C., in McClean, Va., and occupied in its entirety by Freddie Mac. There will likely be more joint venture deals between Northridge and Kamco, as both companies are keen on bolstering their portfolios with high-quality, income-generating assets in high-demand markets across the U.S.

While cross-border acquisitions of U.S. commercial real estate dropped below $50 billion for the first time in five years, according to Real Capital Analytics’ US Cross-Border Investment Compendium, foreign investors from around the world remain attracted to the U.S. market. “We focus predominantly on the Middle East, specifically the Gulf region, and investors in the region are quite bullish on the U.S. market,” Jackson said. “Many investors there tend to be fairly cautious and waited until they felt certain that the U.S. recovery was well underway. Confidence has certainly returned these past few years, and adding to that the relative unattractiveness of the usual alternatives—with uncertainty over Brexit and lack of dynamism in European markets—plus the threshold preference for U.S. investments on the part of dollar-based investors, and it is not hard to understand the enthusiasm.”