224 KSF Silicon Valley Office Campus Commands $45.8M

Great America Place has come under new ownership now that DJM Capital Partners has sold the Silicon Valley property to Newcastle Partners in a $45.8 million transaction.

July 28, 2011
By Barbra Murray, Contributing Editor

Great America Place, a 224,000-square-foot office and R&D campus in Santa Clara, Calif., has come under new ownership now that DJM Capital Partners has sold the premier Silicon Valley property to Newcastle Partners in a $45.8 million transaction.

Built between 1982 and 1984, Great America consists of three structures occupying a nine-acre site in the coveted Golden Triangle area of Silicon Valley, with the Santa Clara Convention Center and the Tech Mart sitting just across the street.

It was at the height of the market in 2007 when DJM acquired the asset from New Urban Properties for a price described on New Urban’s website as “well in excess of $40 million.” DJM proceeded to submit the complex to an extensive renovation that helped attract such tenants as Harris Stratex Networks Inc., the predecessor of Aviat Networks, which signed on for 128,500 square feet in 2009; its lease on the building expires in 2020. In conjunction with the leasing transaction, DJM refinanced the property, acquiring the loan on the asset from Marathon Asset Management at a substantial discount, and secured new financing with American Realty Advisors.

Beyond location and high quality, Great America has another feature that enhances its desirability in the environmentally conscious Silicon Valley — sustainable design. The property is in line to achieve LEED Gold certification from the U.S. Green Building Council, due in no small part to lead tenant Aviat’s initiation of a partnership with DJM to convert its building to on-site solar power and incorporate additional green elements.

Today, Great America is 95 percent occupied, which belies the current state of the office market in Santa Clara and the greater Silicon Valley, where, according to a second quarter report by commercial real estate services firm Cassidy Turley, the vacancy rates are 22.8 percent and 16.4 percent, respectively. However, change is afoot, as the second quarter marked the third consecutive quarter during which vacancies dropped, and all signs point to continued improvement. “We track active space requirements from users in the marketplace and are currently aware of as much as 9.7 million square feet of office and R&D requirements that could potentially land in Silicon Valley over the next 24 months and beyond,” according to Cassidy Turley.