Ivanhoé, TPG, DivcoWest JV Acquires Sizable Silicon Valley Portfolio
- Mar 21, 2013
M West Properties, a partnership of Ivanhoé Cambridge, Montreal, and affiliates of TPG Real Estate, of Fort Worth and San Francisco, and DivcoWest, of San Francisco, has closed its $400 million-plus purchase of 73 buildings in California’s Silicon Valley, the three companies announced Wednesday.
The properties, which total 6.4 million square feet, represent a majority of the assets in a portfolio previously owned by Mission West Properties Inc., of Cupertino, Calif., a publicly traded REIT. This appears to be the first announcement regarding Ivanhoé Cambridge’s interest in the partnership, as a release in late December, when the transaction actually closed, listed only the two other companies.
“This investment of more than $400 million enables us to acquire a critical mass of assets in a rental market that is seeing one of the best growth rates in the United States,” Bill Tresham, Ivanhoé Cambridge’s president/global investments, said in the release.
M West Properties is a single-purpose entity created for the opportunistic investment announced today, a partnership spokesperson told Commercial Property Executive. The portfolio’s tenants include Google, Apple, Huawei, NEC, Stryker and Fujitsu.
The partnership’s financial advisers were Eastdil Secured, Morgan Stanley and Bank of America Merrill Lynch, and its legal advisers were Gibson, Dunn & Crutcher and Skadden, Arps, Slate, Meagher & Flom, according to the December release.
According to CBRE, over the past two years, Silicon Valley has been one of the most robust office leasing markets in the United States. Since the end of 2010, the office/R&D market, which consists of more than 200 million square feet, has shown positive absorption of leased space, resulting in a significant decline in vacancy rates.