Core+ Strategy to Re-lease and Sell

Challenge

Mountain View Courtyards was an eclectic Class A office campus well located within the downtown Mountain View submarket of Silicon Valley, California. The City of Mountain View is the headquarters for Google and home to other leading technology companies. The property was primarily leased to a startup firm that was recently purchased by a large investmentgrade technology firm with a short-term, below market lease. While there was capacity to add a building and parking structure to the campus, we did not intend to further develop the site.

Solution

Our primary objective was to maximize value through a renewal of the existing tenant’s lease for a much longer term. This would allow us to capture higher rents available in the strong local market recovery following the global financial crisis. With significant market demand in the area, we conservatively underwrote the current tenant vacating and then re-leasing the property to new technology tenants.

Results

As the in-place lease neared expiration, we capitalized on proximity to Google’s global headquarters, the opportunity for immediate occupancy, and the potential for additional development, to negotiate a sale to Google. This outcome avoided further capital expenditures and provided favorable returns to our investors.