Silicon Valley Corporate HQ Fetches $180M for Tech Firm
- Jul 23, 2012
It’s not a REIT, it’s not a pension fund–it’s not your traditional real estate investor that will get its hands on Electronics For Imaging Inc.’s 300,000-square-foot Silicon Valley-area headquarters, just 20 miles south of San Francisco. It’s a biopharmaceutical company, Gilead Sciences Inc., which will acquire EFI’s home at 303 Velocity Way in Foster City, Calif., for $180 million. The transaction is expected to close in October.
EFI kept commercial real estate’s usual suspects out of the picture and it wasn’t the first time. In 2009, the digital imaging services provider sold the 163,000-square-foot office building and 30 accompanying acres at 301 Velocity Way to Gilead for approximately $137.5 million.
However, non-real estate players’ snapping up of assets in the area is hardly an everyday event. “EFI grabbed a lot of extra real estate [over the years] and that was uncommon,” a senior professional with Cassidy Turley told CPE. “Gilead’s growth has been uncommon as well.” In 2004, Gilead completed the acquisition of its campus, a 16-building complex encompassing 496,000 square feet of office and lab space, from Equity Office Properties Trust for $123 million.
Gilead owns and occupies 735,000 square feet and leases an additional 180,000 square feet in San Mateo County. And there are plans for even more elbow room as a 195,000-square foot lab building is currently under construction. “They could build up to an additional one million square feet in that market, in that little neighborhood where they’ve taken over,” said the Cassidy Turley source.
With Gilead’s new purchase from EFI, the company’s corporate campus at 333 Lakeside Dr. will continue to mushroom, as 303 Velocity is just a stone’s throw away. EFI, which will stay put at 303 Velocity for up to 12 months following the closing of the transaction, is on the hunt for new digs in the San Francisco Bay area.
However, while the San Mateo County office market closed out the second quarter with a vacancy rate of 14.1 percent, according to a Cassidy Turley report, sizeable blocks of premier office space are scarce. “Buildings that can accommodate 200,000 square feet—buildings within a business park where you’re not spread out by a long distance between two buildings—there’s really only about two that are existing free options,” the Cassidy Turley source noted.