by Roland Li, San Francisco Business Times
Harvest Properties and LaSalle Investment Management have purchased a vacant office and R&D building in Foster City and immediately leased the entire building to a tech firm.
The price for the 126,345-square-foot property at 1149 Chess Drive was about $35.3 million, or $280 per square foot. The sellers were Whitney Investments and Woodstock Development.
The 1975 building is currently fully vacant, but during the sales process, a tech firm signed an 11-year lease for the entire building, said Joss Hanna, partner at Harvest Properties. A source familiar with the deal said the tenant focuses on artificial intelligence and robotics. The asking rent was about $36 per square foot.
The building is undergoing a renovation that include a new entrance and landscaping. The property is zoned for both light industrial and office uses.
“It’s going to be truly transformative to an industrial building,” said Hanna.
Harvest was attracted to the property because of its proximity to companies like Illumina Inc. (NASDAQ: ILMN) and Gilead Sciences Inc. (NASDAQ: GILD) in area.
Cushman & Wakefield was the broker on the deal. “It’s wonderful to have Harvest Properties and LaSalle Investment recognize the intrinsic value of 1149 Chess and be willing to make such a strategic investment in the marketplace,” said Mike Moran, managing principal at Cushman & Wakefield.
LaSalle Investment Management, a subsidiary of JLL, has the majority stake in the building. Harvest and LaSalle have previously partnered to buy properties in San Mateo and San Jose.
Harvest and its partners owns four buildings in San Mateo County totaling about 4 million square feet, said Hanna. It also recently acquired the iconic Tribune Tower in Oakland.
Foster City’s office and R&D vacancy rate was 9.6 percent in the fourth quarter, according to Cushman & Wakefield.
Roland Li covers real estate and economic development