July 29, 2019 — Longfellow Real Estate Partners, which invests in life science, lab and innovation space across the U.S., announced today the acquisition of the Palo Alto Technology Center (PATC) from KBS, one of the largest owners of premier commercial real estate in the nation, for $205 million.
The PATC purchase is Longfellow’s fifth West Coast acquisition since late 2018. KBS originally purchased the property in 2012 on behalf of a sovereign wealth fund.
Located just three miles from Stanford University and a short distance from the Stanford Research Park, PATC’s ten buildings total 259,586 square feet. The campus is about 99 percent leased. Tenants include Stanford, Bill.com, Aurora Innovation and Eversight. Please find images of Palo Alto Technology Center here.
The campus’ specific addresses — 1800-1850 Embarcadero Road and 2445-2465 Faber Place — are nearly adjacent to Interstate 101 and easily accessible for commuters approaching from the North, South and East Bay via the Dumbarton Bridge (Route 84). PATC is an eight-minute drive from the Palo Alto Caltrain stop (shuttle service offered on site).
“We’re excited to add Palo Alto Tech Center to Longfellow’s San Francisco Bay Area portfolio and expand our presence in one of the nation’s most dynamic science and innovation clusters,” says Longfellow Managing Partner Adam Sichol.
Located at the focal point of the modern innovation economy, Palo Alto city officials recently announced that they are poised to make the 2015 cap on new office developments in the University Avenue, California Avenue and El Camino Corridors permanent. The cap limits annual office deliveries to 50,000 square feet per year, which if made permanent would guarantee almost no new competitive products to the Palo Alto Technology Center in the coming years.
“There is no question that Silicon Valley is one of the premier destinations for office tenants,” says Brent Carroll, senior vice president for KBS and asset manager of the property. “Additionally, the barriers-to-entry in this market are very strong on all fronts – physical, political and financial. We are sure the new owners will enjoy the same success we’ve seen in the area.”
The acquisition increases Longfellow’s portfolio to over two million square feet on the West Coast, and includes Bayshore Technology Park and PATC in the San Francisco Bay Area as well as the Inspire, Roselle and Sycamore campuses in San Diego. Longfellow’s total portfolio includes over 4.7 million square feet of life science and tech space owned and under management in innovation hubs such as Greater Boston, Philadelphia and North Carolina’s Research Triangle region.
Longfellow plans to convert some of the campus to life science uses and complete capital improvements including facade enhancements, landscaping, and signage/wayfinding. In addition, Longfellow will implement its proprietary services and amenities package, Elevate, which aims to redefine workplaces with lifestyle perks.
“Palo Alto Tech Center’s proximity to Stanford University and the world-renowned Stanford Research Park, along with its premier tenancy and desirable physical attributes make it an excellent candidate for Longfellow’s signature lab and tech office repositioning,” says Nick Frasco, Longfellow’s West Coast Managing Director.
Greg Cioth, Paul Nelson, Nate Jones and Kurt Chong of Eastdil Secured represented KBS in the deal. Longfellow represented itself.