Rose Orchard consists of five buildings for a total of 314,455 square feet adjacent to Route 237.
SAN JOSE – Following the news earlier this month, Drawbridge Realty acquired the Rose Orchard office campus from Shorenstein Properties LLC for $ 128.2 million. The newly renovated office campus is 100% let and expands Drawbridge's national portfolio in addition to its presence in Silicon Valley.
"It is an exciting move for Drawbridge to add this high quality campus to our portfolio and expand our presence in the Silicon Valley market," said Bill Doyle, vice president, investments at Drawbridge, to GlobeSt.com. "Rose Orchard has recently been modernized and the tenant mix fits in perfectly with the company's strategy to acquire single-tenant corporate real estate in key growth markets in the US."
The Rose Orchard is located at 110-180 Rose Orchard Way off Route 237, just a five-minute walk from @ First Marketplace in San Jose, a food and retail destination. The property consists of five buildings for a total of 314,455 square feet.
The campus will be anchored by ARM Inc., a Softbank-owned company, which recently cemented its long-term presence with Rose Orchard by renting a second building and signing long-term leases for both properties. Teradyne (LitePoint) uses its building as corporate headquarters, while Labcyte, owned by Bechman Coulter, conducts R&D on its campus. Zscaler has outgrown its current building and will move to a nearby larger complex in 2021, allowing Drawbridge to re-rent the 41,286-square-foot building with a single tenant and potentially gain additional benefits.
Rose Orchard is Drawbridge's first acquisition to recently see new equity commitments of $ 240 million. This provides discretionary capital to acquire additional $ 600 million in real estate in target US markets. The new funding was led by Drawbridge's co-owner, global investment firm KKR, which, among others, played an important role in raising the new capital.
Will Connors of JLL's Menlo Park office acted as broker for Shorenstein Properties, while Drawbridge was in the business itself.
As expected, commercial real estate activity in Silicon Valley slowed in the first quarter of 2019. With a massive deal signed in the fourth quarter of 2018 that clears the market of prime available space, a slowdown was expected, according to a report from Colliers International.
The unemployment rate in Santa Clara County rose slightly to 2.8% from the first quarter to the first quarter, but remains below the previous year's estimate of 3% and below the national average of 4.2%, according to the California Department of Employment Development. The technology sector continues to drive the economy. In February alone, technology companies in Santa Clara County created 2,700 jobs.