(SILICON VALLEY, CA) -- July 29, 2019 -- Longfellow Real
Estate Partners, which invests in life science, lab and innovation space across
the U.S., announced today the acquisition of the Palo Alto Technology Center
(PATC) from KBS, one of the largest owners of premier commercial real estate in
the nation, for $205 million.
The PATC purchase is Longfellow’s fifth West Coast
acquisition since late 2018. KBS originally purchased the property in 2012 on
behalf of a sovereign wealth fund.
Located just three miles from Stanford University and a
short distance from the Stanford Research Park, PATC’s ten buildings total
259,586 square feet. The campus is about 99 percent leased. Tenants include
Stanford, Bill.com, Aurora Innovation and Eversight.
The campus’ specific addresses -- 1800-1850 Embarcadero Road
and 2445-2465 Faber Place -- are nearly adjacent to Interstate 101 and easily
accessible for commuters approaching from the North, South and East Bay via the
Dumbarton Bridge (Route 84). PATC is an eight-minute drive from the Palo Alto
Caltrain stop (shuttle service offered on site).
“We’re excited to add Palo Alto Tech Center to Longfellow’s
San Francisco Bay Area portfolio and expand our presence in one of the nation’s
most dynamic science and innovation clusters,” says Longfellow Managing Partner
Adam Sichol.
Located at the focal point of the modern innovation economy,
Palo Alto city officials recently announced that they are poised to make the
2015 cap on new office developments in the University Avenue, California Avenue
and El Camino Corridors permanent. The cap limits annual office deliveries to
50,000 square feet per year, which if made permanent would guarantee almost no
new competitive products to the Palo Alto Technology Center in the coming
years.
“There is no question that Silicon Valley is one of the
premier destinations for office tenants,” says Brent Carroll, senior vice
president for KBS and asset manager of the property. “Additionally, the
barriers-to-entry in this market are very strong on all fronts – physical,
political and financial. We are sure the new owners will enjoy the same success
we’ve seen in the area.”
Growing Portfolio
The acquisition increases Longfellow’s portfolio to over two
million square feet on the West Coast, and includes Bayshore Technology Park
and PATC in the San Francisco Bay Area as well as the Inspire, Roselle and
Sycamore campuses in San Diego. Longfellow’s total portfolio includes over 4.7
million square feet of life science and tech space owned and under management
in innovation hubs such as Greater Boston, Philadelphia and North Carolina’s
Research Triangle region.
Longfellow plans to convert some of the campus to life
science uses and complete capital improvements including facade enhancements,
landscaping, and signage/wayfinding. In addition, Longfellow will implement its
proprietary services and amenities package, Elevate, which aims to redefine
workplaces with lifestyle perks.
“Palo Alto Tech Center’s proximity to Stanford University
and the world-renowned Stanford Research Park, along with its premier tenancy
and desirable physical attributes make it an excellent candidate for
Longfellow’s signature lab and tech office repositioning,” says Nick Frasco,
Longfellow’s West Coast Managing Director.
Greg Cioth, Paul Nelson, Nate Jones and Kurt Chong of
Eastdil Secured represented KBS in the deal. Longfellow represented itself.
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to KBS Real Estate Investment Trust II’s ability to invest in and manage a diverse portfolio, and the performance of Palo Alto Technology Center and of the Palo Alto real estate market. These statements are subject to known and unknown risks, uncertainties and other factors which may cause KBS Real Estate Investment Trust II’s and/or Palo Alto Technology Center’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
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