Quadrus Office Project on Sand Hill Road in Menlo Park Up For Grabs

The Quadrus Office Project on Sand Hill Road is working its way to a sale. The project which features 8 buildings sprawled over twenty acres between 2400 and 2498 Sand Hill Road is owned by the Kaiser Family Foundation and home to numerous venture capital and private equity firms.

The property was the first office development built on Sand Hill Road and it last traded hands in the eighties when Saga Foods sold the campus to the Kaiser Family Foundation for $31,000,000. Since then, rents have soared and Kaiser has added some buildings to the project. Rents at the project are currently in the $11-12 full service (per month) range.

It’s not clear what the sales price on the project will be or who the buyer is, but the last comp for a sale on Sand Hill Road was for $1,000 per square foot when the 133,000 square foot (on 12 acres) Sand Hill Commons complex at 2882-2884 Sand Hill was sold to ING Clarion in 2006 for $133M. It should be noted that Sand Hill Commons is a more desirable project, and commands rents 10-20% higher than Quadrus.

The deal is still being negotiated, but timing of a sale could likely be good for Kaiser if it goes through. The last time the “Sand Hill Economy” faltered, vacancy rates on Sand Hill soared to over 15% and rents were halved. Whether that will happen again or not is unclear in this cycle, but what will likely happen is that the project will continue to be ground zero for the venture capital companies willing to pay top dollar rents for space.

Update (10/19/08): This deal has collapsed.

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