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Mark to Market: Sunnyvale R&D Trades For $40 PSF
Posted By squarefeet On May 7, 2010 @ 7:43 am In Commercial Development,Commercial Real Estate Investing | 2 Comments
Well there you go, $40 psf on a building, and less than $1M/acre for a Sunnyvale R&D project.
We’re back to the lows of 2003 as far as land costs go when Gilbane acquired the 12-acre site of Kifer Commerce Park for about $19 psf. The purchase of 645 Almanor by Trumark sets a new bar though for Sunnyvale as far as building costs go. The property was purchased from Prudential Insurance.
The asset requires a lot of work, but this is the type of deal that will turn into a slam-dunk in the next 10 years. You acquire a dog asset with lots of land for next to nothing, spruce it up a bit, lease it for next to nothing and still throw off a fair yield, get it entitled in a few years, and sell the site to some out-of-area developer with an ego – and OPM to burn – who decides they have to do spec development in Silicon Valley in 7-8 years as the next “development cycle” picks up.
I have to look at the fiber maps, but I’m pretty sure several major carriers have a bunch of fiber running on the south side of 101 in Sunnyvale. If the connectivity is there and this asset could be converted to a data center, then it could prove to be a very sweet deal.
[via Business Journal ]
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 Business Journal: http://sanjose.bizjournals.com/sanjose/stories/2010/05/10/story1.html?b=1273464000^3313611
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