Commercial Real Estate Blog

Facebook is reported to be moving into Stanford Research Park early next year. The company will be moving to a 137,000 square foot building located at 1601 California Avenue previously occupied by Hewlett Packard (HPQ: 40.95 -4.77%). The company will likely continue to occupy some of the space it occupies across its dozen or so downtown sites.

Facebook is estimated to end the year with a headcount of 1,000. That would imply a roughly 150,000-200,000 square feet footprint. Beyond 2009, Facebook will likely look to acquire additional space nearby if it can find it, or possibly build a campus in the same way VMWare did when it needed space in Palo Alto.

A flyer for the property Facebook has leased is here:



Westfield Valley Fair, the 1.5 million square feet mall on the border of Santa Clara and San Jose will break ground on a 500,000 square foot expansion in January. At $809 per square foot excluding anchors, the mall is one of the best performing shopping centers in the United States ringing up sales almost twice as high as the national average. The project, which was acquired in the late nineties by Westfield is looking to make the following improvements over the next few years:

• New Safeway and Long’s Drugs (replacing the current older structures) at Winchester and Stevens Creek
• New Washington Mutual and Bank of America (replacing existing structures) at Winchester and Stevens Creek
• Existing parking on Stevens Creek Blvd. will be demolished and make room for new anchors, shop space, and an additional 3,000 spaces (some of hwich will be on Monroe Street).

The Mercury News is reporting rumours that Bloomingdale’s and Neiman Marcus will be new anchors to the center. I’m not sure about Neiman Marcus, but about two years ago I heard that Bloomingdale’s was not interested in renewing its lease at Stanford Shopping Center, giving credence to the rumour. Neiman Marcus just signed a lease for a 100,000 square foot store at Broadway Plaza in Walnut Creek.

Lehman Brothers (LEH: 0.00 N/A), in a move to raise capital and reduce its real estate exposure, is said to be in talks to liquidate about $14B in commercial real estate assets. Lehman is said to be in talks with BlackRock for the assets. Lehamn currently owns about $10B worth of real estate, and an additional $29.4B in commercial mortgages.

Last month, Shorenstein acquired a piece of mezzanine debt on McCandless Towers from Lehman Brothers. For the past few years, Lehman Brothers had been extremely prolific in mortgage backed securities, and in 2007 had underwrote more than any other firm. In addition, Lehman Brothers is selling apartments it acquired through the Archstone-Smith acquisition (which it partnered with Tishman Speyer on). In the past few months it has sold Archstone assets in Santa Clara and Dublin, and will be looking to liquidate others through the end of the year.

I’m not quite sure how the $14B number surfaced, but it seems that Lehman’s financial condition might just have it bailing out of nearly everything, stabilizing itself, and then when the bond issuance market returns, Lehman gets slowly back on the horse.

Centrum Properties and Angelo, Gordon, & Co. purchased SFO Logistics Center from the GSA for roughly $72M. The price also included an adjacent 5 acre parcel which the buyers will use to improve accessibility to the warehouse, in addition to building an additional 50K SF of industrial space on.

The logistic center/warehouse is approximately 571K SF on a 19.5 acre parcel and is locatd at 1070 San Mateo Avenue in South San Francisco.

Financing for the project was arranged by HFF. A three-year, non-recourse loan was provided through Capmark. The adjustable-rate debt was priced at 325 basis points over the 30-day LIBOR, and represented a 70% LTV.

Neiman Marcus has finalized the lease for its new 100,000 square feet store at Broadway Plaza in Walnut Creek. The store is expected to open as early as the first half of 2010. Broadway Plaza has been a historically strong retail center with average rents north of $750 per square foot.

The center is owned by the Macerich Company and Northwestern Mutual Life. The new store will be on the corner of South Main and Mount Diablo Blvd, and will be two storie.

Aviza Technology’s (AVZA: 0.26 -42.22%) Scotts Valley Headquarters has fallen out of escrow again. This time, the 43 acre property located at 440 Kings Village Road in Scotts Valley fell through supposedly because the buyer, Fowler Property Acquisitions out of San Francisco, exercised its inspections contingency to back out.

The project, consisting of 213,000 SF of improvements on 43 acres was initially in escrow with KB Homes for $22-26M back in 2006. That deal fell out and Fowler stepped into the picture in March at $13M.

This is likely a big blow to Aviza who only had $15M in the bank, and cash flow of -3.6M in the TTM.

As Stanford finishes building its outpatient center in Redwood City this year, it is looking forward to adding additional density at the site. The clinic is scheduled to be completed in the coming 2-3 quarters and Stanford is already working on plans to expand the site beyond the outpatient clinic.

Stanford’s future plans for the site include an addition 1.5 Million square feet of administrative offices and 5,000 parking spaces on the remaining 33-acres. The plan is still several years out and the city still needs to go through zoning changes and entitlements. The first step is on August 12 when the university will seek city approval to have the city devote resources to study the change.

Stanford acquired the Mid-Point Technology Park in 2005 from the French lender Credit Lyonnais for roughly $145 Million (TMG Partners had a remaining minority interest in the project at the time as well). The project encompassed roughly 890,000 SF of buildings on 46-acres. TMG Partners acquired the 46-acres the site sits on in 1996 from Ampex Corp for roughly $36 Million and developed the 380,000 SF complex on a 13-acre portion of the site, which will now be home to the Stanford Outpatient center.