KBS Takes Seconds in San Jose
- Sep 28, 2015
By Barbra Murray, Contributing Editor
One year after snapping up a premier office asset on Almaden Blvd. in downtown San Jose, KBS Real Estate Investment Trust III has done it again. The REIT recently acquired the 416,000-square-foot Almaden Financial Plaza, a three-building office property on Almaden Boulevard, from Embarcadero Capital Partners L.L.C. for $150 million.
KBS REIT III financed the purchase of the 5.8-acre Silicon Valley asset with proceeds from a mortgage loan and its now-terminated primary IPO. The complex, completed in 1981 and renovated 2006, consists of 1 Almaden, 55 Almaden, and 99 Almaden–all located within close proximity of the aforementioned Ten Almaden, which KBS REIT III acquired in 2014 for $116.7 million.
Numbers speak volumes. Attesting to the quality of the property is the fact that, despite downtown San Jose’s average vacancy rate of 16.3 percent, as noted in a second quarter report by commercial real estate services firm DTZ, the complex is nearly fully occupied at 94 percent. Fifty-four names grace a tenant roster that features an increasing number of tech businesses, a trend that prompted KBS REIT III to change the property’s name from Almaden Financial Plaza to The Almaden. The new identity will also come with some new upgrades, including a new conference center and outdoor communal spaces.
In addition to its tenancy, the Almaden’s location in the hub of things downtown was surely another big selling point for KBS REIT III. “The significant walkable amenities, access to public transportation and recently developed and planned future development of multifamily projects provides the tenants at The Almaden a live, work, and play environment,” Rodney Richerson, regional president for KBS Capital Advisors, said in a prepared statement.
KBS REIT III has a newfound taste for Silicon Valley. After marking its entrée into the market with the acquisition of Ten Almaden, the company grabbed The Towers at Emeryville, an 815,000-square-foot Class A campus in Emeryville, Calif., for $248 million.