68,608 SF, Office/R&D asset in Sunnyvale, CA, one of Silicon Valley’s strongest submarkets.
Purchased at healthy cap rate and below-market basis/SF.
Sunnyvale boasts minimal vacancy and growing rents; property rents are well below-market.
Generates a double digit cash on cash yield on a 7-year NNN lease.
100% of space is leased through 2020 to a venture-backed startup company.
We expected one of two business plan outcomes, which combined strong current cash on cash yield with a good potential gain upon sale through either 1) tenant credit improvement or 2) retenanting if tenant vacates.
In October 2016, tenant was purchased by Verizon, resulting in a credit tenancy
We expect to sell the asset in 2017, taking advantage of the improved tenant credit profile.