RESEARCHRANTSM Compliments Of
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June 18, 2007 RESEARCHRANTSM Compliments of... Investment Services Group Michael Speers - Dan Wald - Gary Willard “It’s tough to make predictions, especially about the future.” - Yogi Berra Click here for a pdf… http://www.naibt.com/Rant/ResearchRant--06-18-2007.pdf DEALS IN THE NEWS SAN FRANCISCO – “Boston-based AEW Capital Management is in contract to buy 650 California St. for nearly $300 million, the latest in the steady stream of high-priced downtown office deals.” “If the deal closes, the $620-per-square-foot price tag would be double the $138 million that the current owner, the Pivotal Group, paid for the building in October of 2000. It is nearly the same price per square foot that Principal Global Investors recently paid for the Wells Fargo building at 333 Market St.” “The 490,000-square-foot 650 California was developed in 1964 for the Hartford Insurance Co. Major tenants include Littler Mendelson, Fastiff, Tichy & Mathiason, Jefferies & Co. and Credit Suisse First Boston.” “More than $6.5 billion of sales transactions have closed in 2007, nearly twice the amount changing hands last year. The blockbuster deals have included Morgan Stanley's $2.6 billion acquisition of the Equity Office Portfolio at an average of $675 a square foot and Broadway Partners purchase of the four-building Beacon Capital Partners portfolio for an average of $502 a square foot.” http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2007/06/18/story12.html SUNNYVALE – “Mathilda Place, the three-building Sunnyvale office complex built in 2002 by Silicon Valley developer John Mozart, is being placed on the market, and the asking price for the 473,000- square-foot trio could reach $700 a foot, experts say. At those prices, the development could sell for up to $330 million.” “According to Mozart Development's Web site, major tenants at the complex include Broadcom Corp., Seagate Technology Inc. and Impac Medical Systems Inc.” “Mathilda Place also is within walking distance of Sunnyvale Town Center, a mall on 25 acres, that a RREEF partnership acquired in April. The developer plans on demolishing the mall, creating a mixed-use development of residences, office space and retail.” http://sanjose.bizjournals.com/sanjose/stories/2007/06/18/story10.html BAY AREA – “Talk about coming full circle. A former West Coast REIT is buying assets from a private equity giant that acquired them from another former West Coast REIT in a deal that helped launch the privatization trend last year.” “In its largest transaction since being acquired by GE Real Estate in May of last year, Los Angeles-based Arden Realty Inc. is acquiring 38 suburban office properties from The Blackstone Group LP.” “In San Diego, Arden will acquire the largest number of assets: 13 totaling 30 buildings and 1.6 million square feet. The deal also includes six assets totaling 16 buildings and 791,433 square feet in Orange County, four assets totaling 12 buildings and 707,862 square feet in Salt Lake City, two assets totaling four buildings and 434,391 square feet in the San Francisco market and two assets involving six buildings and 275,193 square feet in the Portland market.” “Last week, Arden widened its Northern California footprint by closing on the purchase of a portfolio of six flex office and R&D assets in Santa Clara and Sunnyvale in the Silicon Valley.” http://www.costar.com/News/Article.aspx?id=4BF406D075059A75990CF7D3A455454A SAN CARLOS – “Mark Logic leased 21,638 square feet in Building 2 of the Skyway Technology Center, at 999 Skyway Road in San Carlos, CA. The company signed a four-year deal. Built in 2000, the Class A office campus consists of two three-story buildings totaling more than 231,000 square feet.” http://www.costar.com/News/Article.aspx?id=7613DCA7467C29F4E44CBFF58D4772FE SAN FRANCISCO- “San Francisco State is soaking up 18,353 square feet more at the Westfield San Francisco Centre, bringing its total presence in the new mall-office complex to 125,000 square feet. With the expansion, S.F. State will occupy all of the fifth and sixth floors, said Frank Fudem of NAI BT Commercial, who represented the university. Microsoft signed a deal in December for 75,000 square feet on the seventh and part of the eighth floor. Forest City, which is a joint partner with the Westfield Corp. in the venture, also has recently taken space on the eighth floor.” http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2007/06/18/newscolumn1.html?page=2 SAN FRANCISCO – “BankServ, an electronic money transfer service, subleased 17,886 square feet from Heller Ehrman at the 333 Bush St. office tower in San Francisco's Financial District. The company signed a seven-year deal for the entire 26th floor of the Class A building.” http://www.costar.com/News/Article.aspx?id=4E506A83CC982E4CF150B252299AC364 MILPITAS – “Waldman Management Group has purchased an industrial facility in the Ames Industrial Park for $10.2 million, or nearly $60 per square foot, from Ames Industrial Partners Ltd. The 174,600- square-foot building is on about eight acres at 1000 Ames Ave. in Milpitas, CA. It features a fenced lot, seven loading docks, heavy power and 19 drive-in bays.” “Fred Eder of NAI BT Commercial San Jose represented Ames Industrial Partners.” http://www.costar.com/News/Article.aspx?id=89B87C53432CAB92B2AD26C6E3103E9D SAN JOSE – “Xactly Corp., a venture-backed sales consulting firm, has subleased the historic Metropole building at 35 S. Market St. in San Jose, CA, from McClatchy Interactive, a Raleigh, NC-based company. Xactly will fully occupy the 23,973-square-foot building for the remaining four-year term beginning next month. The property was taken as-is for roughly the asking price of $1.35 per square foot/month.” http://www.costar.com/News/Article.aspx?id=31CDF4A60E0ADFCAC2D89F43D0117FF8 CAMPBELL – “Casoni Investments LLC acquired the 10,890-square-foot office building at 603 Campbell Technology Parkway in Campbell, CA, from Duc Properties LLC for about $3 million, or $275 per square foot. The two-story building was constructed in 2002 and is in shell condition. It sits on a little more than a half- acre. Duc Properties acquired the property in 2005 for $2.25 million.” http://www.costar.com/News/Article.aspx?id=4E71D20E54BCF54AE2D2A6E4AB62E19F NOVATO – “Safeway Inc has leased 55,000 square feet of retail space at Highway 10 and Nave Drive in Novato for a new store from landlord Grosvenor USA Ltd.” SANTA ROSA – “Orchard Supply Hardware LLC has leased 35,563 square feet of retail space at 2330 Cleveland Ave. in Santa Rosa for a new store location, according to brokers.” SAN FRANCISCO – “Technology advertising agency Godfrey Q and Partners has leased 20,173 square feet of office space on the ninth floor of 100 California St. in San Francisco. The agency, which counts among its clients Symantec Corp., Dolby Laboratories and Cisco Systems, plans to move from its 10,000-square-foot headquarters at 153 Kearny St. to the California Street location this month.” SANTA CLARA – “Brion Technologies Inc, which provides semiconductor design and wafer manufacturing equipment for advanced lithography, has leased 30,495 square feet of research-and-development space at 4201 Burton Drive in Santa Clara.” SAN MATEO – “Teracent Corp., a firm that helps online advertisers determine which of their products is selling well, has renewed its headquarters office lease for 3,604 square feet of space at 400 S. El Camino Real in San Mateo. Teracent was represented by Tyler Hooper of NAI BT Commercial.” SAN CARLOS – “Maxx Metals Inc. has leased 12,000 square feet of office space at 355 Quarry Road in San Carlos from the building's owner, Waldman Management Group.” SAN CARLOS – “Athens Chiropractic Clinic has leased 4,000 square feet of clinic space at 951 Industrial Road in San Carlos. The clinic plans to move from its current location at 1100 Industrial Road. Randy Arrillaga of NAI BT Commercial represented Athens.” HAYWARD – “Tek Seonh LLC has purchased a 9,200-square-foot building at 24782 Hesperian Blvd. in Hayward from Boca Bargoons, a discount fabric retailer in San Francisco, for an undisclosed sum.” (From the Chronicle’s weekly Strictly Commercial column.) http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/19/BUGBAQHBK01.DTL MORGAN HILL – “Montebello Investments purchased an 82,000 sf eight-building industrial project at 16840 Joleen Way from Burt Development for $6 million, or about $73 psf.” SAN CARLOS – “Tesla Motors leased 27,775 sf of office space at One Circle Star Way from Emptoris.” LOS GATOS – “Akeena Solar leased 26,691 sf of office space at 16005 Los Gatos Blvd from landlord CHL Ventures.” MENLO PARK – “Aesthetic Sciences leased 24,045 sf of office space at 1455 Adams Drive from landlord Menlo Business Park.” PALO ALTO – “Foley & Lardner leased 23,744 sf of office space at 975 Page Mill Road from Wilson Sonsini Goodrich & Rosati.” MENLO PARK – “Foundation Capital Management leased 20,453 sf of office space at 250 Middlefield Road from landlord 250 Middlefield Associates.” PALO ALTO – “Vendavo leased 19,782 sf of office space at 1029 Corporation Way from landlord C&J Office Buildings.” (From the weekly transaction summary in the Mercury News.) http://www.mercurynews.com/businessheadlines/ci_6175434 SACRAMENTO – “Four months after it was put up for sale, the 18-story Emerald Tower office building at 300 Capitol Mall has sold for $130 million to a joint venture between Sterling American Property Inc., of New York City, and Hines Interests of Houston.” “The $339-per-square-foot price is at or above expectations from commercial brokers for downtown Sacramento space. In February, predictions suggested the building could fetch $115 million or more.” “The Emerald Tower was acquired for $76 million in 1999 by VV City USA LP, which a subsidiary through a long chain of a private German bank.