LA REIT Shells Out $446M In Palo Alto, Plans To Build ‘Megacampus’
Real estate investment trust Alexandria Real Estate Equities is adding to its already-sizeable Palo Alto portfolio through a $446M acquisition that will add four offices to the company’s area holdings.
The deal would bring Alexandria’s footprint at the Stanford Research Park to 10 buildings. The sale adds to a buying spree in the area of late for Alexandria, which has shelled out nearly $700M at the Stanford campus alone since October 2020.
The Pasadena-based firm said in a filing last week with the Securities and Exchange Commission that it plans to redevelop the buildings into office and laboratory space. The four buildings span 293K SF and are fully occupied with a weighted-average remaining lease term of five years; upon expiration of those leases, the company plans to redevelop the properties and create what it calls a megacampus along with the firm’s other properties on Hillview Avenue, according to the filing.
Tibco Software Inc. occupies at least parts of all four of the buildings, according to the San Francisco Business Times, and once owned the properties before Vista acquired the firm in 2014.
Morgan Stanley is the seller of the 17.5-acre site, according to the Business Times. The deal marks a 35% premium over the $330M paid by Morgan Stanley in 2015.
Elsewhere in San Francisco, Alexandria bought a 10-acre San Bruno site that once housed a Sears department store for $128M in November. That same month, the company paid $55M for a San Carlos commercial building. The seller, Black Mountain Properties, had proposed building a nearly 211K SF life sciences development at the site.
