Holliday Fenoglio Fowler, L.P. Acting by and Through Holliday GP Corp. A
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Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a California licensed real estate broker, California License Number 01385740 (“HFF”) HFF has been engaged to extend to qualified investors the opportunity to acquire the 100% fee simple interest in 490 South California Avenue (the “Property” or “490 California”), a four-story, steel-framed Class A office building with premier ground floor retail located in the heart of Silicon Valley in the California Avenue submarket of Palo Alto, California. The 87.1% leased asset is prominently situated at the intersection of California Avenue and the El Camino Real Corridor, adjacent to Stanford Research Park and Stanford University. The Property offers unparalleled views of the Stanford Hills and features an abundance of walkable retail amenities including direct access to the California Avenue Caltrain stop. PROPERTY SUMMARY 490 S. California Avenue Property Address CALIFORNIA Palo Alto, CA represents Size 23,868 sq. ft. a generational opportunity to Percent Leased 87.1% acquire a core-quality office/retail asset in one of the most sought In-Place Rents $5.28 NNN Market Rents $6.23 NNN after submarkets in the country, Percent Below Market providing an investor stable in- 24% Upon Lease Expiration place cash flow, balanced lease Year Built 1985 Year Renovated 2008 rollover and potential upside from Parking Spaces* 30 spaces rents approximately 24% below Ratio 1.1 / 1,000 market upon expiration. Site Area 0.33 acres Assessor’s Parcel # 124-32-046 *surface / subterranean 2 Iconic Core Class A Office Building with Premier Location Offering Proximity to Desirable Affluent Communities in Surrounding Area Sweeping Views of the Stanford Hills Stanford University & Stanford Research Park Located a short drive to some of the most affluential communities Institutional-quality asset located in the Directly adjacent to Stanford Research Park and in the Bay Area heart of Silicon Valley with 360-degree only a 5-minute walk to Stanford University views of Palo Alto and the Stanford Hills Caltrain-Served Downtown Core Office Space in High Demand Direct Access to Executive Housing Corridor, Rare Institutional Quality Fee-Simple Just a 5-minute walk to the California Avenue Caltrain stop with Major Transportation Arterials & direct access to San Francisco and Silicon Valley Investment Opportunity World Class Amenities 100% fee-simple acquisition opportunity in In close proximity to Palo Alto’s world renowned Worldwide Epicenter of Technology & Innovation Palo Alto retail core; a short drive to Interstate 280 and the 48% of all U.S venture capital investments made in the Bay Area – surrounding executive housing corridor more than 4.6x that of any other region in the country HIGH-PROFILE CORPORATE NEIGHBORS Tibco Frank Rimmerman Corning Theranos Lockheed Martin Cooley LLP Hewlett-Packard PAGE MILL ROAD Sidley Austin LLP Cloudera Morgan Stanley Morrison Foerster LLP Sutter Hill Ventures Simpson Thatcher & Bartlett Genencor Machine Zone Bingham Greenebaume Doll CALTRAIN Paul Hastings EL CAMINO REAL Wilmer Hale Wilson Sonsini Goodrich Google Merck ALMA STREET Wilson Sonsini Goodrich King & Spalding Ability to control one of Palo Alto’s most desirable, Yelp highly-visible retail corners, located along El Camino Real at the entrance of the California Avenue corridor. Tableau Software CALIFORNIA AVENUE CALIFORNIA AVENUE 3 INVESTMENT HIGHLIGHTS Iconic Core Class A Office Building with Sweeping Views of the Stanford Hills 490 California is an irreplaceable, core-quality office building that is appealing to a vast array of tenants due to its prominent location with sweeping views of the Stanford Hills, STANFORD UNIVERSITY proximity to major transportation corridors, walkable amenities and rare underground parking. Situated in a high-barrier-to-entry market with strong economic fundamentals, low single-digit vacancy rates, and substantial rental growth projections. Located at the epicenter of Silicon Valley with direct access to a high concentration of executive housing in Atherton, Palo Alto, Palo Alto Hills, Los Altos Hills, Portola Valley, Woodside, and Hillsborough. Located within walking distance of the California Avenue retail core and California Avenue EL CAMINO REAL Caltrain stop. Rare on-site parking in addition to a two-level city parking structure adjacent to the STANFORD RESEARCH PARK Property. Long-term, net-leased to a CALIFORNIA AVENUE diverse tenant roster at below market rents. Steel-frame construction with substantial building renovations completed in 2008. 4 Rare Institutional Quality Fee-Simple Investment Opportunity Top Performing Palo Alto Submarket: The California Avenue submarket In the past ten years, there have only been nine institutional office building sales maintains an overall occupancy of 96.0% as of fourth quarter 2014 and greater than 20,000 square feet in the Downtown Palo Alto/Middlefield Corridor/ Class A asking rents of $6.17 psf/mo. NNN. Sand Hill submarkets, a testament to the long-term ownership in the area and the rare opportunity 490 California presents to acquire a high-quality asset in the Palo Alto - Submarket Overview submarket. Total Under Total Class A Asking Inventory Construction Vacancy Rate Rent (NNN) The California Avenue submarket in particular California Avenue 976,461 45,472 3.96% $6.17 features just three properties greater than 20,000 There have been just five Downtown 2,240,862 66,979 4.76% $7.14 square feet built in the past 20 years. comparable fee-simple Stanford Research Park 3,018,661 86,925 6.01% $6.38 Class A properties that Bayshore 1,527,074 - 9.45% $3.45 Additionally, 490 California offers the unique East Palo Alto 458,565 - 11.11% $4.93 ability to acquire a 100% fee simple interest have sold on Caltrain in PALO ALTO - TOTAL 8,221,623 199,376 6.35% $5.98 directly adjacent to the Stanford Research Park, the past decade which is comprised of solely leasehold properties. Limited Class A Space on the Market: Currently, there are only three Year % Sale Buyer availabilities in the California Avenue submarket for tenants seeking Class Property City Built Size (SF) Leased Date Seller A office space of 2,500 to 5,000 sq. ft. 2882-2884 Menlo 1987 / 133,000 100% Dec-14 Invesco Sand Hill Rd Park 2012 Significant Tenant Demand: Silicon Valley is experiencing record levels of Clarion tenant demand with office tenants in the market seeking approximately 17 49% Interest million sq. ft. of space. 200 Middlefield Menlo 2012 41,933 100% May-14 TIAA-CREF Rd Park Menlo Equities Tenant Demand - Silicon Valley 130 Lytton Ave Palo Alto 1984 50,000 100% Nov-13 Rockwood Capital / Tarlton Q2 2005 - Q2 2010 Q3 2010 - Q4 2014 Properties 7.8 million sq. ft. average tenant demand 11.2 million sq. ft. average tenant demand Kenson Ventures 18,000,000 550 Hamilton Palo Alto 1971 35,678 96% Aug-13 CM Capital Ave Private 15,000,000 2400-2498 Menlo 1975 / 206,000 82% May-11 DivcoWest / PSP Sand Hill Rd Park 2005 Kaiser Family Foundation 49% Interest 12,000,000 100 Hamilton Palo Alto 1983 / 71,803 100% Mar-11 RREEF Ave 2005 Embarcadero Capital 9,000,000 321 Middlefield Menlo 1968 / 48,397 100% Nov-06 Pollock Financial Group Rd Park 2007 Allstate Insurance 6,000,000 310 University Palo Alto 1912 / 26,160 100% May-04 Premier Properties Ave 1993 Management Private Group 3,000,000 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 2008 Q1 2008 Q2 2008 Q3 2008 Q4 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 1024 Q4 2014 250 University Palo Alto 1990 41,428 100% Nov-03 Inspire Real Estate Holdings Ave Hewlett-Packard 5 Direct Access to Executive Housing Corridor, Major Transportation Arterials & World Class Amenities 490 California is located directly off of El Camino Real and a short distance to Interstate 280, providing direct access to the nearby executive HILLSBOROUGH housing corridor. This stretch of communities including Monte Sereno, Los Altos, Los Altos Hills, Palo Alto Hills, and Portola Valley features HILLSDALE some of the most affluent communities in the Bay Area and includes executives seeking low commute times. Caltrain: Caltrain is a commuter rail line that Stanford Shopping Center: With 140-plus stores, dozens of stretches from San Francisco to the north and restaurants and coffee shops, and public art by nationally acclaimed Gilroy to the south. The rail system is comprised artists, the open-air Stanford Shopping Center is considered one of of 32 stations, with 29 served daily, two weekend- the top shopping centers in the country. The Center features award- only stations, and one football-only station located ATHERTON winning gardens, a European-style street market, and 1.3 million at Stanford University. Trains leave San Francisco square feet of premier retail space. Located conveniently off El multiple times every hour and the Baby Bullet can Camino Real near Downtown Palo Alto and Stanford campus, the make the 32-mile commute between San Francisco Stanford Shopping Center serves the nearby affluent communities of and the Palo Alto Caltrain Station in less than 39 MENLO PARK Palo Alto, Menlo Park, Woodside, and Atherton. minutes - and only 48 minutes to the California Avenue stop via the Limited-Stop train. Downtown Palo Alto: In addition to the world-renowned Stanford Shopping Center, Palo Alto features a vibrant downtown shopping California Avenue Corridor: Major Palo Alto district, a popular shopping and restaurant district centered around thoroughfare connecting the Property to the Caltrain California Avenue just south of the Stanford campus, and Town & station, while offering a multitude of walkable Country Village, a specialty center on El Camino Real across from amenities.