Westcore Properties LLC of San Diego, one of the most active commercial real estate buyers and sellers in Silicon Valley, is near closing on a more than $350 million sale of Silicon Valley properties to Hines Interests LP.
Before the buy, Houston-based Hines, a privately-held development and property management company, owned 700 properties and managed another 90 million square feet in the United States and 12 other countries.
Since 1991, it has created 19 investment funds with more than $19 billion in equity. Among its institutional partners is the California Public Employees' Retirement System, or CalPERS.
Hines is a large property owner in San Francisco and has holdings in Palo Alto and South San Francisco, according to its Web site. The Silicon Valley deal, which involves 1.6 million square feet of valley and mid-peninsula buildings, appears to be Hines' first major foray to the south.
The buy brings to Hines peninsula properties in Foster City and Redwood City totaling nearly 325,000 square feet.
In the valley, it includes the 306,000-square-foot Vasona Technology Park in Campbell as well as multiple locations in San Jose, Sunnyvale, Santa Clara and Fremont.
Hines was also a stealthy but effective player in Apple Computer Inc.'s (NASDAQ:AAPL - News) acquisition of approximately 50 acres in Cupertino for Apple's new corporate campus. It is not clear whether the Houston company has remained on board to help Apple design or build the new digs.
Calls to the Hines office in San Francisco for comment on the Westcore buy were not immediately returned. But information on the sale was confirmed for the Business Journal by a source with direct knowledge of the deal.
As it is finalizing its Hines sale, Westcore has agreed to acquire two San Francisco office buildings for $126 million from Mack-Cali Realty Corp., a New Jersey-based real estate investment trust.
Westcore also has bought a 178,000-square-foot R&D and manufacturing building in San Jose. from contract manufacturer Flextronics International Ltd. Flextronics has agreed to lease the buildings from Westcore for 10 years, with an initial lease of 80 cents a square foot excluding maintenance and operating expenses.
After the three transactions close, Westcore will hold 1.23 million square feet of Bay Area properties, says Neil Johnson, Westcore's acquisitions director in Northern California.
"We are a believer in the valley and the Bay Area as a whole, and we are going to continue to buy and sell properties in the region for the foreseeable future. We are going to harvest some profits and continue to buy," Mr. Johnson says.
Published October 2, 2006 by the Silicon Valley/San Jose Business Journal
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