PALO ALTO — A veteran real estate firm’s property shopping spree in Palo Alto has now topped $1 billion with the company’s latest purchase of a choice office campus in the South Bay tech hub, public documents show.
Alexandria Real Estate, acting through an affiliate, has bought a four-building office complex on Hillview Avenue in Palo Alto, documents filed on Jan. 6 with the Santa Clara County Recorder’s Office show.
The affiliate, ARE San Francisco No. 97, paid $446 million for the offices and a ground lease for the land beneath the quartet of buildings, which have addresses of 3301 through 3307 Hillview Ave., according to the county property files.
The four buildings together total about 292,000 square feet, according to a brochure circulated by CBRE, a commercial real estate firm that’s been marketing the property.
Pasadena-based Alexandria Real Estate bought the buildings, which are located in the prestigious Stanford Research Park area, through an all-cash deal.
As is customary with property transactions in the research park, Stanford University retained the ownership of the land beneath the four buildings and Alexandria Real Estate bought a ground lease for the tech campus.
The county documents indicated that Alexandria paid $267.6 million for the buildings and $178.4 million for the ground lease, bringing the total value of the deal to $446 million.
With the most recent transaction, including the value of the ground lease, Alexandria has spent at least $1.37 billion purchasing properties in Palo Alto over a four-year period that started in January 2018.
Palo Alto is one of the strongest office markets in the Bay Area, primarily because the city is a major tech hub and has low vacancy rates, according to property experts.
The office complex that Alexandria has bought, however, isn’t occupied, although it is leased, according to the CBRE brochure. The entire complex is available for sublease, CBRE said in the brochure. The existing lease extends until March 2027, CBRE stated.
Pasadena-based Alexandria is eyeing a revamp of the four office buildings to take advantage of the current surge in leasing by life sciences, medical device and biotech companies, according to a Jan. 4 filing by the company with the Securities and Exchange Commission.
“We expect to redevelop these spaces into office and laboratory space,” Alexandria stated in the SEC documents.
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