Tidewater Capital is on the march for office real estate in Sunnyvale, paying $65 million for three buildings three months after dropping more than $100 million for seven more nearby.
An affiliate of the San Francisco-based investor led by Craig Young bought the Sunnyvale Business Center at 920, 930 and 950 De Guigne Drive, the San Jose Mercury News reported.
The seller of the 175,000-square-foot campus was St. Paul Fire & Marine Insurance, based in Connecticut. The deal works out to $371 per square foot.
The price for the three-building campus was 9.4 percent above the property’s assessed value in January of $59.4 million, according to the newspaper.
At the time of purchase, Tidewater obtained a $75 million loan from Maxim Credit Group.
The three-story campus, built in 1990, is home to such tech firms as Illumio. The buildings’ occupancy at the time of sale was not disclosed.
The Tidewater bet comes during a slump in the office market, when a shift to remote work has pushed vacancies to 37.3 percent in San Francisco and 35.6 percent in Downtown San Jose.
The office vacancy in Silicon Valley in the second quarter ending in June was 21.9 percent, according to JLL. Commercial Cafe pegged Sunnyvale’s last year at 18.4 percent. The city appears a bright spot in the overall market, according to The Real Deal.
In June, Tidewater Capital bought a seven-building tech campus in Sunnyvale for $100.8 million — nearly half what it traded for five years ago.
The price for the 431,100-square-foot office and research campus surrounding 935 Stewart Drive, a few blocks from its recent purchase, was $234 per square foot.
The sellers, Houston-based Hines and New York-based Goldman Sachs, bought the 21.4-acre campus in 2019 for $188 million, or $436 per square foot.
Tidewater Capital, founded in 2013 by Craig Young, announced last fall it had secured more than $200 million in equity commitments for its latest fund, allowing more real estate investment in the Bay Area, according to the San Francisco Business Times. The firm’s assets under management are unknown.
In August last year, the firm surrendered an historic office building at 1440 Broadway in Downtown Oakland to its lender after defaulting on more than $25.5 million in debt.
— Dana Bartholomew
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