The Bay Area Real Estate Journal
Corporate User Buys Vacant Fremont Buildings
Submitted February 9, 2010, 4:14 PM
McLean, Va.,-based J.E. Robert Cos. has sold three vacant office/R&D buildings totaling 196,000 square feet in Fremont for $21 million in an all-cash transaction. The buyer was Mentor Graphics Worldwide, an Oregon-based supplier and consultant to the electronics and semiconductor industries.
The sale price represents a value of $107 a square foot, according to industry sources. JER refused to confirm the sales price and buyer.
Mentor Graphics, which specializes in electronic hardware and software design automation, currently has regional offices in San Jose on Ridder Park Drive, according to its Web site.
The sales price represented “a fair deal” for both parties, said Drew Arvay, managing partner at the San Jose office of brokerage Cassidy Turley BT Commercial.
“When you factor in that the buyer was an end user and doesn’t have to worry about leasing the property, and the property already had amenities like a day-care and cafeteria operations, it’s a fair deal,” he said.
Similar properties acquired by investors facing leasing risk have fetched closer to $80 a square foot, he said.
JER and TMG sold eight other properties within the park that were 100 percent leased before the three-building sale. The companies retain eight buildings in the park totaling 544,960 square feet.
JER evaluated leasing or selling the three Mentor buildings for the past 12 months. “We thought on a long-term basis that to move it to a single-user would be the best fit,” said Craig Smith, a JER director.
JER made its original investment in Bayside Technology Park for its commingled, opportunistic fund, JER Partners III. JER would not disclose its purchase price. The company raised $823 million in equity for the fund, completing its money raising in2004. The fund is now fully invested.
JER holds two other assets in the greater San Francisco Bay Area, though both are held by different funds. One of these is a 300,000 square-foot office/R&D space in north San Jose. The company purchased this property in 2006. The other is a 246-unit condo project in downtown San Francisco known as 1160 Mission Street that JER developed in conjunction with TMG. Construction on this project started in 2007; five units remain unsold.
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