CUPERTINO, CALIF. — Mission West Properties (NASDAQ: MSW), a California-based real estate investment trust, has entered into two agreements to sell all of its real estate assets for $1.3 billion.

A joint venture between DivcoWest and TPG Real Estate will pay about $400 million in cash and assume $389 million of debt and other obligations. Some of the company's operating partnerships will retain other assets and liabilities with an approximate net value of $525 million.

Mission West owns and manages 101 research and development facilities, mostly in Silicon Valley, totaling about 7.6 million square feet. The REIT put itself up for sale in December to take advantage of the positive market conditions.

In a statement last year, the company announced it was exploring a sale due to “an increase in portfolio sales in various markets around the U.S., including the Silicon Valley portion of the San Francisco Bay Area, lower borrowing costs and a steady decline in cap rates from the increased investor demand for yield oriented real estate investments.”

Mission West says it plans to liquidate after it completes the transactions by the end of the year.

The company said shareholders and owners of operating partnership units that choose to redeem their stakes will receive a distribution of $9.20 to $9.28 per share in cash, although the final amount may be less. The distribution estimate includes the sales proceeds and the final 2012 annual dividend.

According to the Mercury News, if the purchase is concluded as expected, it would mark the largest property sale in the Bay Area this year.

— Liz Burlingame

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