Irvine Company has made another pricey office investment in the Silicon Valley city of Santa Clara.
The Newport Beach-based company, the largest office owner in California, this month completed the purchase of Tech Park at Freedom Circle, a 12-building, 427,500-square-foot office park next to Highway 101.
It paid Foster City-based Legacy Partners about $137 million, or $320 per square foot, for the complex, according to local reports.
Legacy Partners paid about $107 million for the park in mid-2013.
The deal adds to a string of big Irvine Co. deals for developable land and existing properties in Silicon Valley in the past few years. The Freedom Circle property is close to Santa Clara Square, a 1.6-million-square-foot Irvine Co. office and retail development under construction on nearly 100 acres.
Irvine Co. is reported to have paid more than $300 million for that land in a series of transactions between 2012 and 2014.
The latest purchase “is part of our ongoing, long-term investment in Santa Clara,” Irvine Co. spokesperson Mike Lyster said in a statement.
Other Irvine Co. deals in Silicon Valley that topped the $100 million mark in the past few years include the 2012 purchase of Silicon Valley Center in San Jose, a 439,000-square-foot office complex that sold for an estimated $130 million, or nearly $300 per square foot.
The privately held real estate investor and developer paid a reported $132 million in 2011, or about $282 per square foot, for Central Research Park, an eight-building, 468,000-square-foot office campus in Sunnyvale.
The Freedom Circle deal follows by a month the Irvine Co.’s purchase of five office buildings in the Peery Park business district in Sunnyvale. Those buildings, which total about 113,000 square feet, sold for nearly $40 million.
Irvine Co. now owns about 4 million square feet of offices in Silicon Valley, not counting those under development.
“We will be integrating Tech Park at Freedom Circle into our office portfolio as another option for customers alongside Santa Clara Gateway and our office campus under construction at Santa Clara Square,” Lyster said.
The 900,000-square-foot Santa Clara Gateway office development opened a few years ago as one of the first speculative office projects built in the Silicon Valley after the last recession.
Pricey PSF
A Rite Aid in Corona del Mar has traded hands for one of the lowest capitalization rates and highest per-square-foot prices ever seen for an Orange County retail property.
A Newport Beach-based family trust paid $8 million, or more than $1,100 per square foot, for a nearly 6,900-square-foot building at 3141 E. Coast Highway that’s leased to the drugstore chain.
The per-square-foot price is more than triple of what the average retail property sold for in OC in 2014, according to brokerage data.
The property sold at a 2.94% cap rate, the lowest rate of any drugstore sale in the U.S., according to Paul Bitonti, vice president of investments for the Newport Beach office of Marcus & Millichap, who along with colleague Joe Costanzo represented the buyer and an Irvine-based seller in the deal.
The stand-alone retail building’s exterior got a remodel last year, and the buyer “was attracted to the excellent intrinsic value and rental upside that will be realized in the future” Bitonti said.
Impac Insight
Irvine-based Impac Mortgage Corp. has disclosed the terms of its purchase of CashCall Inc.’s mortgage operations.
The deal, announced on Jan. 8, initially didn’t include a purchase price, but recent filings with the Securities and Exchange Commission show Impac is paying $10 million in cash, plus half a million shares of stock for the mortgage operations assets of privately held CashCall.
Impac’s stock is now about $8 per share, putting the value of the stock portion of the deal at nearly $4 million. The company has a market value of nearly $80 million.
