Square Feet

Coming on the heels of its recent $150M purchase of the San Tomas Business park, NVIDIA is working to put the pieces in place to develop approximately 2,000,000 square feet of office and R&D space on the site. The park and an adjacent 11-acre piece consists of 475,000 square feet of office and R&D space spread across 10 buildings on 25 acres. The project sits directly across the street from NVIDIA’s existing headquarters campus, which it is leasing from Sobrato until 2012.

Harvest Properties, which sold the site to NVIDIA, previously had plans itself for developing 2,000,000 square feet of Class A office space. The project entailed half a dozen buildings and parking garages, the tallest of the planned buildings being six stories. As of last month, the Business Journal reported that nobody was willing to comment on the development plans, but we’ve learned that NVIDIA is in fact pursuing development of the site.

Update: This job posting on NVIDIA’s site confirms the project is in fact moving forward:

An SEC filing by NVIDIA has confirmed the purchase of approximately 475K SF of Office Space and land from Harvest Properties and Blackrock in Santa Clara by NVIDIA. We previously reported on the purchase back on February 15th.

The purchase of the park comes with a price tag of $150M, includes 25 acres, and 10 buildings on the property. It is being purchased by NVIDIA.

NVIDIA is rumored to be buying San Tomas Business Park from Harvest Properties. The 10-Building project on San Tomas Expressway right across from NVIDIA’s campus was picked up by Harvest and BlackRock Realty in late 2005 for roughly $205 per square foot.

The project encompasses 10 buildings of roughly 47K SF each spread across 24 acres. There is no confirmation of the deal or whether additional land or buildings have been rolled into the deal or when the deal is slated to close.

This deal comes about a year after NVIDIA killed negotiations to acquire a Class A highrise in downtown San Jose from Sobrato that ultimately ended up getting acquired by BEA Systems.

Hines is in contract to sell its Parkside Towers office complex in Foster City. The complex is roughly 400,000 SF and is reportedly being sold to Harvest Properties and Invesco for roughly $180M ($452 psf). The complex is about 80% leased and includes tenants IBM, Axciom, and QuinStreet.

 The project was purchased by Hines about two years ago from Equity Office Properties which built the project originally for Inktomi. Inktomi never occupied the complex and subsequently paid a $50M termination fee to get out of its lease.

I suspect after closing rents will move into the $40 NNN rent range and leasing agencies to be swapped from Cornish & Carey to possibly NAI BT Commercial.

Update (03/2008): The project was 99% leased at COE. A 91K SF lease to Rearden Commerce which was announced one day after the initial posting of this item brought the project up to 99% occupancy at the time of sale.