By Mark Mueller
Irvine-based Bixby Land Co. has bought a seven-building office campus in Silicon Valley, the commercial real estate developer and investor’s largest acquisition in nearly seven years.
Terms of the purchase of the 405,300-square-foot Lake Park Business Center in Santa Clara were not disclosed.
Brokerage sources in Northern California put the deal’s value at about $110 million, or a little more than $270 per square foot.
It’s the largest-ever purchase for Bixby in Silicon Valley and the company’s biggest buy in any market since 2007, said Bixby Chief Executive Bill Halford.
Bixby bought the property with an undisclosed institutional investor.
The seller was San Francisco-based Divco West.
Silicon Valley Bank occupies three of the seven two-story buildings at the campus, which was about 65% leased at the time of the sale.
The purchase came during a week when two mainstays of Silicon Valley’s technology and social media sectors made moves in Orange County (see related story, page 1). Bixby’s deal also is the second big commercial real estate deal in Santa Clara to come to light this month that involves an Orange County developer.
Newport Beach-based Irvine Company is said to be close to announcing a nearly 440,000-square-foot lease with telecom giant Ericsson Inc. at a nearby office project it has under development.
That deal would be the largest office lease in Silicon Valley—California’s most robust commercial real estate market of late—in more than a year that doesn’t involve Google, according to local reports.
Bixby’s latest purchase and the Irvine Co. development project—called Santa Clara Square—are near Levi’s Stadium, the new home of the San Francisco 49ers football team.
The stadium, which will open later this year, is about a mile north of the 101 Freeway.
Lake Park Business Center, which is on about 19 acres, is expected to be used for excess parking on game days, according to Halford.
The stadium has generated a lot of new business activity and development in the surrounding area, said Halford, who led the office division of Irvine Co. until joining Bixby in 2006.
Bixby has developed a niche over the past two years of turning older, largely vacant office properties into more contemporary spaces.
Other properties the company has redeveloped in Silicon Valley have been snapped up by tech companies like Infoblox and Nimble Storage for their headquarters.
Lake Park Business Center—the company’s fourth and largest creative office space redevelopment project in Silicon Valley—will follow the same game plan. Bixby expects to spend about $20 million to reposition the campus.
The company said it plans significant exterior and interior renovations to the California Mission-style buildings at the campus, including a design that promotes an indoor/outdoor work environment throughout the project.
The renovations will be completed by the end of the year, according to the company. Early plans call for 100,000 square feet or more of empty space to be set aside for one user, with the remainder turned into multi-tenant space.
Halford said his company is eyeing additional purchases for similar types of projects but is expanding its net for deals, especially in Southern California.
Silicon Valley’s real estate market is red hot and showing little sign of cooling, meaning “it’s harder to find these types of opportunities,” Halford said.
Bixby has made a pair of smaller purchases in Orange County over the past five months, in Irvine and Newport Beach, and now is looking at sites in San Diego, he said.
It also has a few projects under way in Los Angeles County.