California continues to be a hotspot for real estate, in both the residential and commercial real estate markets. One of the major commercial real estate transactions that has taken place recently is the purchase of a technology campus for a whopping $725 million. Alexandria Real Estate Equities just purchased the property from DivcoWest.
The property that was sold, called One Kendall Square, spans 644,000 square feet. DivcoWest paid more than $390 million for this seven-building complex only a couple of years ago and thus seems to have experienced a good return on its investment. Right now, the complex, which is about eight acres in size, is 98 percent leased. About 50 lab, retail and office tenants are using it, but over 50 percent of these leases are due to expire by 2019.
The rents currently average about $47 for each square foot. The real estate equities company that made the purchase may also decide to convert office space into laboratories, which will yield higher rents. A total of 48 percent of the complex is being used for office space currently, while 36 percent is being used for laboratory space; 16 percent is being used for retail purposes.
This real estate transaction involving the purchase of the tech campus appears to have gone relatively smoothly, but not all commercial real estate transactions in California do. A purchase/sale dispute can quickly stall a transaction or cause it to fail altogether. Appropriate legal guidance can help purchasers of commercial property to protect their best interests and accomplish their particular investment goals in the Golden State.
Source: pasadenanow.com, "Pasadena Company Announces $725 Million Real Estate Buy", July 18, 2016