PALO ALTO — A veteran real estate firm’s property shopping spree in Palo Alto has now topped $1 billion with the company’s latest purchase of a choice office campus in the South Bay tech hub, public documents show.
Alexandria Real Estate, acting through an affiliate, has bought a four-building office complex on Hillview Avenue in Palo Alto, documents filed on Jan. 6 with the Santa Clara County Recorder’s Office show.
The affiliate, ARE San Francisco No. 97, paid $267.6 million for the buildings, which have addresses of 3301 through 3307 Hillview Ave., according to the county property files.
The four buildings together total about 292,000 square feet, according to a brochure circulated by CBRE, a commercial real estate firm that’s been marketing the property.
Pasadena-based Alexandria Real Estate bought the buildings, which are located in the prestigious Stanford Research Park area, through an all-cash deal.
As is customary with property transactions in the research park, Stanford University retained the ownership of the land beneath the four buildings and Alexandria Real Estate bought a ground lease for the tech campus.
The county documents indicated that Alexandria paid $178.4 million for the ground lease, bringing the total value of the deal to $446 million.
With the most recent transaction, excluding the value of the ground lease, Alexandria has spent at least $1.19 billion purchasing properties in Palo Alto over a four-year period starting in January 2018.
Including the value of the ground lease, the value of the property purchases totals at least $1.37 billion.
Palo Alto is one of the strongest office markets in the Bay Area, primarily because the city is a major tech hub and has low vacancy rates, according to property experts.
The office complex that Alexandria has bought, however, isn’t occupied, although it is leased, according to the CBRE brochure. The entire complex is available for sublease, CBRE said in the brochure. The existing lease extends until March 2027, CBRE stated.