Rockwood Capital Acquires 130 Lytton in Downtown Palo Alto for $53M
- Dec 02, 2013
In a recent grab for a shrinking market of office space in the San Francisco metropolitan area, Rockwood Capital teamed up with Tarlton Properties to buy 130 Lytton, a 50,000-square-foot building in downtown Palo Alto.
Rockwood Capital, based in White Plains, N.Y., won the bid from the seller KG-Lytton for $53 million, which translates to $1,060 per square foot. According to Office Research Report published by Marcus & Millichap, the median sales price for Bay Area office properties purchased in a 12-month-period of the 2013 third quarter was $330 per square foot. The report says that cash-heavy technology companies are driving up the cost of office space in major office districts.
The four-story building, one of the largest office spaces in Palo Alto with outdoor patios on all floors, sits directly across from the Caltrain Station, which made the property all the more attractive to Rockwood, said Vice President Jason Oberman.
“One of the cornerstones of our investment strategy is investing in mixed-use environments that benefit from public transportation,” he said. Commuters can get to San Francisco from this train station in 35 minutes via a “baby bullet” express.
The building is currently 100 percent leased as the headquarters for A9, a subsidiary of Amazon that develops search and advertising technology. In 2004, KG-Lytton bought the property from Hewlett-Packard Co. for $11.7 million. As reported in Office Research Report, office-using employers, like A9, are helping to bolster a growing economy in the San Francisco area, creating more than 30 percent of the new jobs filled in the last year.
That’s good news for the office market sector. “We are confident in the long-term desirability of office space in downtown Palo Alto, with its dynamic retail core and urban atmosphere,” added Oberman.
Rockwood Capital, LLC is an 82-person real estate investment firm with offices in San Francisco and Los Angeles, Calif., and White Plains, N.Y. The company provides equity capital combined with real estate expertise for repositioning, recapitalization, development and redevelopment of retail, hotel, residential, office, and R&D space. In the last 23 years, Rockwood has invested in more than $15 billion in real estate.
Tarlton Properties, based in Menlo Park, Calif., has been a regional property developer in Silicon Valley for nearly four decades. The company partners with both private and institutional capital to acquire, reposition and develop office, mixed-use and R&D properties.