Hudson Pacific Expands Presence at Stanford Research Park
- Dec 15, 2016
Palo Alto, Calif.—Hudson Pacific Properties Inc. has acquired a leasehold interest in Page Mill Hill, a five-building office campus totaling 182,676 square feet in Stanford Research Park and Palo Alto, for $150 million, from a joint venture owned by Lionstone Investments and CalSTRS.
“Page Mill Hill is a terrific opportunity to deepen our presence in one of the West Coast’s premier office markets,” Alex Vouvalides, Hudson Pacific Properties CIO, told Commercial Property Executive. “The Silicon Valley office market has been one of the best performing in the nation this cycle, and rents in the Stanford Research Park are second only to New York City. Additionally, the building is currently 100 percent occupied by blue-chip professional services firms, and there is an opportunity to add value to the property.”
The acquisition complements Hudson Pacific’s current holdings in Stanford Research Park, which include six properties comprising more than 1 million square feet of office space.
“We have had a presence in the Stanford Research Park since mid-2015, when we acquired six properties and 1 million square feet of office space as part of our Blackstone portfolio acquisition,” Vouvalides said. “With the acquisition of Page Mill Hill, we continue to be the premier landlord in this iconic office park, which is home to some of the world’s most innovative companies. We understand this market well, and the synergy with our existing holdings made this a perfect fit for our portfolio.”
Among its properties in the region are Palo Alto Square, Foothill Research Center in Palo Alto, Page Mill Center in Palo Alto, Metro Center in Foster City, Skyport Plaza in San Jose, and Gateway in San Jose.
“The Palo Alto submarket is one of the best within the Silicon Valley market. Stanford Research Park, in particular, is extraordinarily supply constrained in terms of office space,” Vouvalides said. “Only 25 percent of inventory is dedicated to office users, and the balance is R&D. As a result, this micro market in Palo Alto consistently outperforms in terms of occupancy and rent growth.”
Page Mill Hill is currently fully leased to prominent legal and accounting firms, including Gibson, Dunn & Crutcher; Frank, Rimerman + Co.; Manatt, Phelps & Phillips; and Perkins Coie.
“Whenever Hudson Pacific makes an acquisition, we seek to create additional value through leasing and strategic capital improvements,” Vouvalides said. “Page Mill Hill was an opportunity to do just that. Over the next two years, we will make both interior and exterior improvements, which will further enhance our ability to mark-to-market rents as leases roll. The majority of in-place leases are significantly below market.”
Image courtesy of Yardi Matrix