Mary Ann Azevedo, Contributor
In its fourth major Silicon Valley buy in less than four years, Bixby Land Co. has scooped up a large Santa Clara office campus from Divco West with plans to invest $20 million to reposition it.
The purchase of Lake Park Business Center marks Irvine-based Bixby’s largest Silicon Valley acquisition to date. Bixby and Divco West declined to reveal the sales price for the 19.3-acre site, but an individual familiar with the transaction pegged it at about $110 million, or $265 per square foot.
Bixby Land CEO Bill Halford did say the firm plans to spend $20 million to turn the seven-building, two-story campus “into a contemporary workplace.”
The complex is bordered by Patrick Henry Drive, Bunker Hill Lane, Old Ironsides Drive and Tasman Drive and is adjacent to light rail. It was 65 percent leased, with Silicon Valley Bank in three recently renovated buildings. The remainder of the property is vacant, according to Halford.
It’s those other four vacant buildings that Bixby plans to focus most on.
“Most developers that are doing value-add repositionings tend to do modest renovations, but ours are pretty significant,” Halford said. “We’re almost re-doing them from the ground up.”
Bixby intends to remove windows and replace them with more contemporary glass. On the ground floors, the firm is adding floor-to-ceiling glass. It will also significantly revamp the lobbies, facades and outdoor spaces.
The property was appealing in large part due to its proximity to the San Francisco 49ers’ new Levi’s Stadium.
“We think this area in Santa Clara is always a good market, but the presence of the stadium is going to bring some other amenities to the area that will benefit all the properties around it,” Halford said. “It’s a micromarket where the neighborhood is going to be materially better going forward.”
Campbell-based Studio G will design the project, and Bixby will put out a bid for a contractor. Halford expects renovations to start in the second quarter with completion seven to eight months after.
Bixby, which specializes in acquiring and turning around older office space, has been active in Silicon Valley of late.
Last July, Bixby and JP Morgan sold a two-building campus in Santa Clara for $42 million one year after signing Infoblox Inc. to a long-term lease. The 127,000-square-foot property was located on 3111 Coronado Drive. Bixby had spent about $5.5 million to modernize it.
The company also recently signed Nimble Storage to its 165,000-square-foot campus at 211, 251 and 282 River Oaks Parkway in San Jose. And it just completed construction on another multimillion-dollar rehab, a 250,000-square-foot, four-building project it calls “THE Campus.” Bixby is close to signing two leases there, Halford said, declining to identify potential tenants.
Kidder Mathews Managing Partner Dave Vanoncini said repositioning the recently acquired Santa Clara property “makes a lot of sense.”
“This is a well-located site that might appeal to a wide range of tenants,” he said.
There is currently a shortage of quality product in the 15,000- to 35,000-square-foot range, according to Vanoncini.
“Such spaces are sought after and very difficult to find compared to large chunks of space,” he said.
Cassidy Turley’s Greg M. Davies agrees.
“The supply of multi-tenant office space is being greatly reduced in that part of Santa Clara due to the impending redevelopment of the 72.8-acre site at Bowers & Scott owned by the Irvine Company and down the road the likely redevelopment of 4800 Great America Parkway by Sobrato Development Company,” he wrote via e-mail.