Boston Properties, CPPIB to Develop 1.1 MSF Office Campus in Silicon Valley
SAN JOSE, CALIF. — Boston Properties Inc. (NYSE: BXP) has formed a joint venture with institutional investor Canada Pension Plan Investment Board (CPPIB) to develop Platform 16, a 1.1 million-square-foot office campus in downtown San Jose. Boston Properties, a developer and owner of Class A office buildings, holds a 55 percent ownership stake in the joint venture.
The Silicon Valley project will comprise three buildings situated near Diridon Station, the largest multi-modal transportation hub in the Bay Area consisting of the Caltrain, VTA light-rail and the ACE train lines, as well as the planned BART and high-speed rail lines. Platform 16 will also be near Guadalupe River Park and adjacent to Google’s planned transit village spanning 8 million square feet.
“Platform 16 is ideally located in one of the largest technology hubs in the country,” says Aaron Fenton, vice president of development for Boston Properties. “With easy access to public transportation, as well as local housing, culture, food and entertainment, Platform 16 will help companies attract and retain the talent they need to support their growth.”
Designed by Kohn Pedersen Fox Associates, Platform 16’s name originates from its proximity to Diridon Station and its planned 16 outdoor terraces across the three buildings. Onsite amenities at Platform 16 will include a large fitness and wellness center and a conference center.
Boston Properties entered into a 65-year ground lease last November with previous landowners TMG and Valley Oak Partners. As part of the deal, the company secured the right to purchase the project’s underlying 5.4 acres during a 12-month period beginning in Feb. 1, 2020 at a fixed purchase price of $134.8 million.
Last year, Boston Properties and CPPIB formed another joint venture to purchase a California asset. The pair acquired the 47-acre Santa Monica Business Park for approximately $627.5 million.
“Partnering with Boston Properties on the Platform 16 development is a great example of our real estate strategy in the United States,” says Hilary Spann, CPPIB’s managing director and head of real estate investments for the Americas. “We are very pleased to further our relationship with a best-in-class owner and operator and we look forward to expanding our office portfolio in the dynamic Bay Area.”
Boston Properties has secured approvals and entitlements for the development of Platform 16. The developer has also completed design plans and begun to clear the site. Construction could commence in the next six months, according to Boston Properties. No tenants have been announced.
Boston Properties is based in Boston and focuses its acquisitions and developments in five gateway U.S. markets: Boston, Los Angeles, New York, San Francisco and Washington, D.C. The company’s portfolio spans 50.9 million square feet across 193 office properties, including 12 properties under construction.
The company’s stock price closed on Monday, Sept. 30 at $129.88 per share, up from $120.96 a year ago.
Canada Pension Plan Investment Board invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits in the best interest of 20 million contributors and beneficiaries.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan. As of June 30, the CPP Fund totaled 400.6 billion Canadian dollars (approximately $302.6 billion).
— John Nelson