By George Avalos
Bay Area News Group
Developers have paid more than $100 million for a seven-building Santa Clara office complex that they intend to transform into a modern tech campus, a fresh indication that the new 49ers football stadium is spurring nearby development activity.
The new owner, Bixby Land, which has already renovated three office parks in the San Jose-Santa Clara area, will spend $20 million to renovate Lake Park Business Center. The office complex is just west of Levi's Stadium, where the San Francisco 49ers are slated to play football game this year for the first time. The property is on Tasman Drive and is also bounded by Patrick Henry Drive, Bunker Hill Lane and Old Ironsides Drive.
"This project is at the center of the booming business activity surround Levi's Stadium," said Bill Halford, president of Bixby Land.
Exact terms of the property purchase weren't disclosed. However, sources with direct knowledge of the deal say Bixby paid slightly above $105 million for the 405,000-square-foot office complex, which was sold by Divco West.
The developers hope to capitalize on the emerging "stadium effect" that has intensified commercial real estate activity in this part of Santa Clara and nearby north San Jose. Hotels and offices are among the new projects that are being actively planned or are under construction in the vicinity.
The upgrades at the office park will create a campus that includes outdoor spaces where employees can congregate for meetings or to relax.
"Bixby is an innovator," said Rob Shannon, a senior vice president at CB Richard Ellis, a commercial real estate brokerage. "They are delivering new and creative features and tenant solutions to the market."
Tech companies are seeking these kinds of sleek, state-of-the-art office spaces for their operations as a way to attract and retain talented engineers, designers and researchers. Mountain View-based Google and Cupertino-based Apple both are planning ultra-modern office centers near their headquarters, while Menlo Park-based Facebook is constructing a second campus near its head offices that will feature a rooftop garden.
Bixby has undertaken far-ranging renovations of three office centers, two in San Jose and one in Santa Clara, that it reshaped as modern campuses. The features at the various campuses include fire pits, bocce courts, music and grills. The Santa Clara complex has landed the headquarters of Infoblox. One of the two San Jose campuses was leased to Nimble Storage as its new headquarters.
The other San Jose office complex, a 250,000-square-foot three building sites called THE Campus, recently completed construction and might soon land a tenant.
"We have good activity on THE Campus," Shannon said. "It plays well to what tenants want in new offices."
The renovation of the newly acquired office complex will start later this year and should be complete before year's end, Bixby said. It's the largest renovation so far in Silicon Valley by Bixby, which has become a market leader in efforts to transform older offices into modern campuses.
"We've learned through our previous developments that companies place a premium on work environments where their employees can enjoy the outdoors without having to leave the property," Halford said.
Contact George Avalos at 408-859-5167. Follow at twitter.com/georgeavalos