Commercial Real Estate Blog

Shorenstein has acquired a $51.1M mezzanine loan collateralized by McCandless Towers in Santa Clara. Globe St. is reporting that the the debt was acquired at a discount.

McCandless Towers was purchased by Tishman Speyer last July at a cost of $500 PSF ($213M), representing a 4.5% cap rate. McCandless Towers features two 11-story, 210,000 square foot, Class A office buildings anchored by McAfee. The project was completed between 1986 and 1988 and features a 1,400 stall parking garage. The project was built by Swinerton and designed by Hoover Associates.

Shorenstein has been an active buyer of junior debt in primary markets, picking up debt in Washington D.C., New York, LA, and more locally, a $40 mezzanine loan on the Moffett Towers project in Sunnyvale which we wrote about back in October of 2007.

A 112,000 square foot office building currently leased to WSGR (Wilson, Sonsini, Goodrich & Rosati) has been picked up by Shorenstein. The purchase price comes in at a whopping $85M representing a price tag of $750+ per square foot! The building was built in 1998 and is a single-tenant leased investment.

$85M is a monster number and is predicated amongst other things on the strength of the rental market within Stanford Research Park and it’s A+ location. Nonetheless, that is a big number.

Shorenstein has purchased a $40M stake of the $216.8M construction financing debt package provided to Jay Paul Co. earlier this year for the construction of the Moffett Towers Project.

The Moffett Towers project includes about 900,000 square feet of Class A Office Space and will eventually include an additional 900,000 square feet as well as a 40,000 square feet fitness center for tenants.

Although no leases have been signed at the project to date, it is rumored that Google has signed up to take a piece of the project.

The developer of Moffett Towers, Jay Paul Co., was also responsible for the construction of Pacific Shores Center in Redwood City. PSC is also a 1.8M SF office project which was recently sold early this year to Starwood Capital for approximately $830M. Starwood Capital recently flipped a portion of that project to Shorenstein.