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May 01, 2019  

Apple-Leased Offices Pitched in Silicon Valley

American Realty is marketing a Silicon Valley office complex that’s fully leased to Apple.

The 311,000-square-foot Cupertino City Center, in Cupertino, Calif., has an estimated value of about $860/sf, or $267 million. At that price, the buyer’s initial annual yield would be in the vicinity of 5%. Eastdil Secured is representing Los Angeles-based American Realty.

Apple’s lease, which has 3% annual rent bumps, runs until 2029 and includes two five-year renewal options at fair market value. The rent is 18% below the Class-A property’s projected market asking rate.

Market pros think the property would command well over $1,000/sf if rented at the prevailing level in the market. So, while the offering is geared toward core buyers, investors are being told there’s potential to significantly raise rents in the long term.

The two-building complex, at 20300 & 20330 Stevens Creek Boulevard, is near Apple’s headquarters.

American Realty acquired Cupertino City Center in 2011 for $120 million, or $383/sf. Eastdil advised the seller, a partnership that included Chicago-based Walton Street Capital and Westbrook Partners of New York.

The property’s amenities include a conference center, bike storage, lockers and showers. The offering also includes the rights to about 1,100 parking spaces in a shared garage that isn’t part of the listing.