SAN JOSE, California (November 29, 2021) – KBS, one of the largest investors in premier commercial real estate, has sold 300 Holger Way, a 99,552 square-foot, Class A office building in San Jose, California, a submarket of Silicon Valley. The property, the final asset KBS has sold in the eight-building District 237 office park the firm acquired in 2013, was purchased by an affiliate of Menlo Equities for $35 million. 300 Holger Way was owned by KBS Real Estate Investment II.
District 237, formerly known as Corporate Technology Centre, is located in a particularly active area within Northern California that is highly popular with office users, according to Gio Cordoves, Western regional president for KBS.
“District 237 presents a premier value-add opportunity to capture tenant demand in the Silicon Valley market,” says Cordoves. “The location offers close proximity to several world-leading technology firms, such as Google, which continues to expand its development footprint in San Jose. This is just one example of the demand for office space in this market.”
Silicon Valley’s Class A office market is rebounding and could prove to be one of the strongest performing markets in the country. The current monthly office rental rate is the highest on record for Silicon Valley. Also, an increase in rental rates during the third quarter for all product types, including office, research, and industrial spaces, has led to a surge of new construction throughout the Silicon Valley market. According to CBRE’s Silicon Valley office market report for the third quarter, 1.5 million square feet of office space was delivered to this market, 1.1 million square feet of which was preleased. Talent retention and recruitment is one of the main reasons companies continue to seek Class A office buildings in the area, notes Cordoves.
The property is conveniently situated near the @First Marketplace retail development, providing a robust amenity base for tenants, according to Brent Carroll, asset manager for District 237 and senior vice president of KBS. The retail development contains numerous restaurants, retail establishments and hotels ideal for traveling office users.
“300 Holger Way’s advantageous location is well positioned to attract a wide range of technology-based users,” says Carroll. “The area is home to the nation’s largest cluster of technology firms, and it benefits from this exuberant entrepreneurial spirit.”
A three-story steel-frame building that was constructed in 2000 and fully renovated in 2019, 300 Holger Way sits on a 4.86-acre parcel and benefits from the continued influx of venture capital dollars invested in the Silicon Valley. The building features extensive glass lines and efficient floor plates. Amenities include nearby transportation, shopping, entertainment, and dining options.
KBS has invested more than $3 million in renovations to the property that included completely new interiors, upgraded exteriors, landscaping, a new outdoor amenity area, an upgraded parking lot and a new HVAC system.
Joseph Moriarty, Scott Prosser, Jack Depuy, Brad Zampa and Mike Walker from CBRE represented KBS in the sale of 300 Holger Way.
“This transaction represented a rare chance to acquire a fully renovated Class A office building in the premier Northern San Jose submarket,” says Moriarty, Executive Vice President for CBRE.
The buyer recognized the opportunity to acquire one of San Jose’s most desirable office buildings, which has been revitalized due to KBS’ world-class management of this asset, according to Michael Johnston of Menlo Equities.
“We were very pleased to work with KBS in the disposition of 300 Holger Way during the revitalization of the Silicon Valley office market,” said Fischer, Greenberg Traurig’s Chair of the West Coast Real Estate Practice and Co-Managing Shareholder of the Orange County Office, who led the Greenberg Traurig team representing KBS.
The property is located at 300 Holger Way in San Jose, California.
Please click here for photos of 300 Holger Way at District 237.