Commercial Real Estate Blog

Cedar Fair, the owner of Great America Theme Park is reportedly asking north of $110 Million for the park and the land lease it has with the city of Santa Clara for the 181 acre parcel the park sits on. The annual minimum rent for the land lease is $5.3M and runs through 2039. At the same time, Cedar Fair is working to reduce the property’s assessment for tax purposed to $44M.

This is interesting because it highlights how the value of a property can vary so widely between buyers. To the 49ers, the deal represents an opportunity to get Cedar Fair out of the way on its march to getting a stadium to help the franchise increase its overall value. To any other party looking at the site, there are two basic options, a) taking over a theme park with declining revenue, or b) developing the site with only a 30-year window to recover their investment. Both options seem to be less than appetizing..

It will be interesting what sort of deal the parties can negotiate, if any, but it’s fairly clear right now that the 49ers don’t have to worry about to many other buyers jumping into the fray.

It’s been rumoured in the past that Google was nibbling at taking down space at Jay Paul’s Moffet Towers Project. In what could be construed as less than favorable news for Moffett Towers, insofar as Google is concerned, NASA announced today that it has inked a deal with Google for 42 acres of land at the NASA Ames Research Center in Mountain View for the purpose of developing a high-tech campus for Google. Under the terms of the 40-year lease, Google will lease 42 acres to construct up to 1.2 Million square feet of an office and R&D campus. Google will pay NASA an initial base rent of $3.66 million per year. NASA will use the proceeds to cover the full cost of the lease and the balance may be used for capital revitalization and improvements of the real property assets at Ames.

Construction of the project will be in three phases, with the first planned to begin by the end of September 2013, the second phase by 2018, and the third by 2022. Google also intends on constructing company housing and dining, sports, fitness, child care, conference amenities.

In the late nineties, Sobrato signed a ground lease for the construction of its Mission Valley College office campus in Santa Clara. That was a 26-acre piece that they used to develop 685,000 SF of office on. That lease represented about $.147 per SF, per month on the dirt, and $.243 per buildable SF. In contrast, the Google/NASA deal has Google paying about $.164 per SF, per month on the dirt, and ultimately when the 1.2M SF is built out, $.254 per buildable SF.