Tishman Speyer Sells Silicon Valley Office Building
The asset traded for nearly $122 million.
Tishman Speyer has sold 400 Castro St., a 138,000-square-foot office building in Mountain View, Calif., to Spear Street Capital for $121.5 million.
Tishman Speyer developed the Class A building in 2002 and immediately leased the office space in its entirety to law firm Fenwick & West, which has remained a tenant there ever since.
The property is in downtown Mountain View. On-site dining includes Cascal restaurant, Peet’s Coffee and Sweetgreen. Other amenities include underground parking and rooftop decks.
READ ALSO: Office Demand Surges With Higher Absorption, Increasing Sales
According to Tishman Speyer, the transaction represents one of the strongest pricing outcomes for a Mountain View office sale in recent years. The firm reported that, since a recapitalization in 2012, the asset’s gross performance was 17.4 percent IRR and 1.9x equity multiple.
Tishman Speyer was represented by an Eastdil Secured team led by Managing Director Nate Jones.
Mixed messaging in Silicon Valley
The Silicon Valley office market saw its overall vacancy decline by 60 basis points quarter-over-quarter and 170 basis points year-over-year to 16 percent in the second quarter, according to a report from Kidder Mathews.
The report noted that office investment sales totaled 1.4 million square feet in the past quarter, which brought year-to-date sales volume to 2.2 million square feet. Though that figure was down year-over-year, average pricing reached about $454 per square foot, which Kidder Mathews interpreted as an indication that although investors remain selective, they’re nonetheless seeking well-located assets with strong tenant profiles.
In Mountain View specifically, total availability is 23.7 percent on an inventory of 14.8 million square feet, with about 260,000 square feet currently under construction. Year-to-date absorption is a negative 15,000 square feet, according to Kidder Mathews.
In August, Genesis Commercial Capital and JR Asset Management secured a $147.5 million financing package for 750 Moffett, a 221,788-square-foot office property in Mountain View. The building was completed in 2020 and is fully occupied by Google.
The non-recourse package, arranged by CBRE, comprises a $26 million senior loan from UMB Bank and $121.5 million in C-PACE financing from Nuveen Green Capital. The proceeds will refinance existing debt prior to loan maturity.
You must be logged in to post a comment.