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Hines Nabs Twin Santa Clara Offices in $195 Million Deal

| Commercial Real Estate News, Deals, Featured, Office| Views: 0

Global investor and developer Hines Interests partnered with Los Angeles-based Oaktree Capital Management to acquire a two-building office portfolio in Santa Clara―totaling 445,157 square feet of space. Shorenstein received $195 million―more than $438 per square foot―for the two Class A properties at 3945 and 3965 Freedom Circle. The assets are located within the Bay Area’s Golden Triangle, a region flanked by Route 237 and I-880 and surrounded by major hotels, universities and the San Jose International Airport.

CBRE’s Russell Ingrum, Joseph Moriarty, Scott Prosser and Jack DePuy represented the seller. Hines has put Cushman & Wakefield’s Colin Feichtmeir, Scott Dever, Kelly Yoder and Steve Horton in charge of securing additional leases for the two towers. Jed Brush, senior vice president at Shorenstein said the company was excited to have reached the agreement for the sale of Santa Clara Towers. He also expressed confidence in the ability of the portfolio to attract a diverse mix of tenants interested in Class A office space in Santa Clara.

Santa Clara office space

3965 Freedom Circle, Santa Clara

The sale was financed by a $180 million loan, backed by Mesa West Real Estate Income Fund. The office properties―built in 1986 and 1998, respectively―were recently renovated, with upgrades to the corridor lighting, elevators, and on-site pool and fitness center, as well a full lobby renovation in the 3965 building.

Shorenstein made a hefty profit on the twin 11-story office towers, which the company acquired from Tishman Speyer in 2012 through a deed in lieu of foreclosure. Although it’s unclear how much the company paid for the properties at the time, the transaction enabled Shorenstein to acquire the portfolio at a huge discount compared to its pre-recession value.

Hines’ current asset management and property portfolio comprises 514 buildings totaling 222 million square feet, including several properties in Sunnyvale, San Jose, Los Angeles and several other cities throughout California.

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