SUNNYVALE, CALIF. — Kilroy Realty Corp. has purchased a 12-acre site in Sunnyvale to develop a 587,000-square-foot campus for social networking giant LinkedIn Corp.
The $315 million office project will feature three mid-rise, Class A buildings and a parking structure. The structures are expected to meet LEED Silver requirements.
The development will also be located along two major arteries, Maude and Mathilda avenues, bisecting Sunnyvale and just one mile from Caltrain. The Class A office vacancy rate in Sunnyvale is less than 5 percent. The area has been a draw for tenants looking to cluster around major technology firms, including Apple, Yahoo! and AMD.
According to local reports, LinkedIn's 12-year lease at the property is valued at more than $400 million.
The deal caps a breakout year for Los Angeles-based Kilroy, which now has four projects totaling 1.5 million square feet in its Bay Area development pipeline. The projects total approximately $800 million and are fully pre-leased to major technology firms, including salesforce.com, Synopsys and Audience, in addition to LinkedIn.
“We're delighted to partner with LinkedIn in the creation of a new LEED-certified office facility,” says John Kilroy Jr., Kilroy Realty Corp.'s president and chief executive officer. “This is another opportunity for us to create significant value for our shareholders through the development of the highest quality real estate at superior returns.”
Eli Khouri, Kilroy's chief investment officer, adds that the opportunities to build ground-up facilities for technology companies follows Kilroy's strategy of “acquiring superior locations in the best submarkets where we can offer superb space to the region's premier tenants.” Kilroy, which has a more than 60-year history, operates a portfolio of more than 12.5 million square feet in coastal market locations.
Kilroy plans to complete the LinkedIn complex in the second half of 2014.
Sherman Chan and Bob Steinbock, both senior vice presidents of CBRE Group, acted as investment brokers in the transaction.
— Liz Burlingame