Eaton Vance Fund Buys $53M Office, R&D Property in Santa Clara
- Apr 07, 2008
Boston-based Eaton Vance Management has acquired a Santa Clara, Calif., office/research and development building for $53 million on behalf of an investment fund that it manages. “Our strategy for this fund is to acquire long term credit lease properties triple net leased to a single tenant,” K. C. Swartzel, director of acquisitions and dispositions for Eaton Vance’s real estate group, told CPN today. “This building is 100 percent leased to Abbott Laboratories.” Abbott uses the building’s lab to hand-apply coatings to heart stents. A coating provides a biologically inert barrier between the surface of the stent, circulating blood and walls of the blood vessel. The 218,400-square-foot building flex building has office, laboratory and warehouse space, but the property’s chief value is the 14.51-acre site, which is located 10 minutes from the Norman Y. Mineta San Jose International Airport. “The land is worth two-thirds of the purchase price,” Swartzel (pictured) said. “So we’re also making a long term land redevelopment play.” Swartzel went on to say that the building would probably be demolished at the end of the current lease, which has 13 years to go. At the end of 2007, vacancy rates for industrial, flex/R&D, and warehouse space ranged from 4.7 percent to 13.5 percent across four Santa Clara submarkets, according to market research conducted by Grubb and Ellis Co. Asking rates ranged from $1.15 to $1.67 per square foot, compared to $1.23 per square foot on average for the San Jose region surrounding Santa Clara. Eaton Vance Management is a wholly owned subsidiary of Eaton Vance Corp., an investment management firm with $152.9 billion under management.