Multiple Asia-based investors have spent hundreds of millions of dollars in recent months on an array of Silicon Valley commercial real estate properties.
From office campuses to hotels, the Asian investors’ deals show they remain bullish about Silicon Valley, as they’re willing to buy here even with property values at lofty levels.
“Silicon Valley is still the hot spot for investments,” said Chad Leiker, a first vice president with Kidder Mathews, a commercial realty brokerage. “Asian investors still view this area as ground zero for innovation and buying property.”
The most active Asian investors are affiliates controlled by China-based Han’s Laser Technology Industry Group, which have spent at least $199 million in four acquisitions starting in the spring, including commercial properties in north San Jose, downtown San Jose and Sunnyvale, this news organization’s review of county property records shows.
Measured by dollar value, potentially one of the largest property purchases involving Asian investors occurred in September, when CBRE Global Investors bought a 941,000-square-foot complex at 3000 through 3200 Tannery Way in Santa Clara.
The $610 million deal was undertaken on behalf of a group of multiple investors including the California State Teachers’ Retirement System and Korea Post, CBRE said. Korea Post operates the South Korea mail and package delivery system, according to Bloomberg News.
CBRE didn’t disclose the total number of investors or how much each investor spent.
Palo Alto Networks occupies the entire complex, known as The Campus @ 3333, CBRE said.
“Korean investors are yield-driven and attracted to high-quality assets,” said Gardner Ellner, senior director of commercial acquisitions with CBRE Global Investors. “The Campus @ 3333 addresses both of these factors.”
Ellner said the property has a quality tenant and a Class A building.
The Han’s industrial firm appears to be the most active Asian-based investment group at present, county records show. Han’s operates locally out of a north San Jose building that property documents show it is leasing.
The most recent deal known to involve an Asian investor came on Oct. 6, when 680 W Maude, affiliated with the Han’s industrial group, paid $27 million for an office building on West Maude Avenue in Sunnyvale.
In August, Han’s Holdings paid $48.5 million for a 118,000-square-foot office complex at 2300 Orchard Parkway that was leased to San Jose-based Cavium, which makes semiconductors used in networking equipment. Cavium has begun interior improvements on the site, according to county records. Cavium has signed a 10-year lease to occupy the building, Securities and Exchange documents show.
Using an affiliate called Han’s Hospitality at 300 San Jose, the Chinese investment group paid $87.3 million in April for the Hilton Hotel at 300 S. Almaden Blvd. in downtown San Jose.
In March, Han’s San Jose Hospitality paid $36.2 million for an office complex at 3553 N. 1st St. that totals 85,000 square feet. That building is leased to struggling China-based tech firm LeEco.
A Korean resorts operator, Aju Hotels and Resorts, paid $64 million in June for the iconic Westin San Jose – more commonly known as the Sainte Claire hotel – in downtown San Jose
In September, Best Fang Holdings, a group based in China, paid $58.5 million for The Campus at First office complex, county records show. The two-building property at 3060 N. First St. and 3080 N. 1st St., which is adjacent to Montague Expressway and a light rail line, was empty at the time of the deal.
Prestige Cascade, an affiliate of Singapore-based Shanda Asset Management Holdings, paid $20 million for a big office complex totaling 416,000 square feet at 3403 Yerba Buena Road in south San Jose, public records show.
“Asian property investors believe there is still quite a bit of runway left in terms of upside in Silicon Valley real estate, compared with other property investments they might find in other markets or in their own country,” Leiker said.
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