Case Study

Summary

Java @ Geneva Drive is comprised of one single-story office/R&D building, consisting of 51,017 total square feet located on a single 3.4 acre parcel. The property was built in 1977 and is located within the desirable Moffett Park submarket of Sunnyvale.

Situation

  • Orchard Partners purchased the property in 2011 in an off-market transaction.
  • At the time of acquisition, the property was 78% leased to two tenants: Equinix, a data center operator, and enVie Interactive, a social gaming start-up, both at significantly below-market rents.
  • Both in-place leases were set to expire within 6-18 months, but with Equinix holding two consecutive 1-year options, also at significantly below-market rates.

Results

  • Upon closing, Orchard Partners began a capital improvement plan, consisting of “market ready” work on the vacant unit, updating the landscaping and entry systems, refreshing the overall appearance and visibility of the property.
  • In late 2011, Equinix and EnVie notified ownership that it would not be exercising its fixed-rate options, thus allowing ownership to realize market value for the space more quickly than anticipated.
  • While in the planning stages of a further ‘market ready’ improvement program to capitalize on the full building availability, Orchard Partners received an unsolicited offer from a user which would allow an early exit of the asset at a substantial profit. The sale closed in August, 2012.