Realty investors have grabbed a Sunnyvale office building that’s in the heart of an area that Google has targeted in an $800 million shopping spree for commercial real estate properties.
(TNS) -- SUNNYVALE — Realty investors have grabbed a Sunnyvale office building that’s in the heart of an area that Google has targeted in an $800 million shopping spree for commercial real estate properties, brokers announced Wednesday.
A partnership called Deerfield Caribbean, which is controlled by Menlo Park-based Deerfield Realty, paid $17.5 million on Aug. 31 to buy a building at 250 E. Caribbean in Sunnyvale, according to Santa Clara County property records.
Deerfield’s purchase of the 36,000-square-foot building was arranged through property agents with CBRE Capital Markets, a commercial realty brokerage.
Baidu USA leases the East Caribbean Drive building, said CB Capital Markets brokers Joe Moriarty, Scott Prosser, Tyler Meyerdirk and Jack DePuy. Baidu also occupies another building a short distance away at 1195 Bordeaux Drive in Sunnyvale.
The Baidu operations in Sunnyvale include the search giant’s Baidu Intelligent Driving Group, according to the company’s web site.
“Terrific interest from potential buyers” was how Prosser, an executive vice president with CB Capital Markets, described the enthusiasm for purchasing the property. Baidu’s eight-year lease was a key driver of the buying interest.
Mountain View-based Google’s head-spinning buying binge of a few weeks ago also might have caught the attention of prospective buyers for the East Caribbean Drive building.
On July 25, Google bought at least 45 parcels in Sunnyvale from several different sellers, according to this publication’s review of Santa Clara County property records. Those sellers were connected to affiliates of CB Richard Ellis, a commercial realty brokerage.
The combined value of the properties that Google bought was roughly $800 million, property records on file at the county Assessor’s Office show.
The buildings Google bought in July provide a combined space of at least 2.3 million square feet, according to this news organization’s review of numerous property brochures and flyers for all of the properties. Google hasn’t disclosed its plans for the Sunnyvale buildings it bought.
Separately, Google and its development ally Trammell Crow are busy purchasing an array of properties in downtown San Jose where the tech giant intends to build a transit-oriented campus for 15,000 to 20,000 of its employees near the Diridon train station and SAP Center.
The Sunnyvale building purchased by Deerfield Realty had previously undergone a renovation costing $2.7 million, the brokers said.
In Silicon Valley, nearly 300 older research buildings totaling 16 million square feet have been demolished and replaced with multi-story office buildings, residential complexes or mixed-use projects during the last six years, according to CB Capital Markets.
One of the motives for the surge in building renovations is companies can dangle attractive new offices in front of prospective employees as a way to recruit tech workers.
“The inventory of single-story and two-story research and development product will continue to decline as developers push for higher density uses, which will intensify the competition for these buildings,” CB Capital Markets stated as part of its analysis of the Aug. 31 deal involving the purchase of the Baidu-occupied building in Sunnyvale.
©2017 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.