The pandemic didn’t keep Newport Beach-based KBS Realty Advisors from completing one of the larger, and pricier, office sales in California in recent months.
In late June, a non-traded real estate investment trust overseen by KBS sold two fully-leased offices at District 237, an eight-building office complex in North San Jose.
The buildings, totaling 142,710 square feet, sold for $95.2 million, or $667 per square foot.
High-end offices in Orange County, by comparison, typically trade in the $400 per-square-foot range.
KBS still owns three remaining buildings at the Silicon Valley office park; it paid $239 million for the entire 610,083-square-foot, eight-building complex in 2013, then kicked off sales in 2018 when it traded three offices there in separate deals totaling $97.4 million.
The two recently traded buildings include the 46,070-square-foot 100 Headquarters Drive building and the 96,640-square-foot 200 Holger Way office.
The buyer is Miami-based Exan Group, an independent real estate fund that has 3.9 million square feet under management, mostly in the U.S., Spain and Latin America.
“KBS consistently identifies exceptionally well-located assets in markets where powerful value creation is possible,” said Rodney Richerson, regional president, western region, for KBS, in a statement.
“North San Jose, with its close proximity to tightly occupied Silicon Valley cities such as Palo Alto and Mountain View, is one of those markets. Tech tenants who like Silicon Valley and are seeking more competitive rates are drawn to this submarket, and discerning office investors like Exan Group recognize how an institutional-grade property like District 237 adds value to their portfolio.”
CBRE Group Inc.’s Northern California capital markets team brokered the deal, while attorneys Bruce Fischer, Howard Chu and Chrisdo Fan of Greenberg Traurig LLP’s Orange County office represented KBS as legal counsel in the disposition.
The sale comes a few months after KBS wrapped renovations at the project and rebranded it from Corporate Technology Centre to District 237.
Renovations include exterior and interior upgrades such as landscaping, a new open office layout, updated common areas, new fitness center and outdoor amenity areas.
The company said these upgrades helped to secure new tenants, including Raytheon, a global technology and defense company that inked a 142,710-square-foot lease deal for both of the recently sold buildings.