HP's First Corporate Home Sold to S.F. Firm: PALO ALTO BUILDING GARNERED 35 BIDS
Posted on: Thursday, 18 May 2006, 09:10 CDT
By Katherine Conrad, San Jose Mercury News, Calif.
May 18--The site of Hewlett-Packard's first corporate headquarters, a prime piece of Palo Alto real estate, sold Wednesday after receiving 35 bids.
The three-story building on Page Mill Road near Stanford University most recently had been the headquarters of Agilent Technologies, and was purchased by developer Jay Paul Co. of San Francisco for an undisclosed price. A representative for Jay Paul said the company paid more than $300 a square foot; an industry source put the sale price at $425 a square foot, which would be about $95 million.
According to Santa Clara County tax records, the 224,000-square-foot building was assessed for $68.67 million last year.
The site hosted the first headquarters for HP after the co-founders moved the company out of its legendary garage in the 1940s. The original buildings have since been razed. The current structure was built for Agilent in 2000 after HP spun off the company. Agilent is moving to a Santa Clara campus.
The interest in the property was "unprecedented," said Phil Mahoney, a broker for Cornish & Carey Commercial. Mahoney, Howie Dellmar, Michael Leggett and Gerry Rohm represented both Agilent and Jay Paul in the transaction.
Matt Lituchy, Jay Paul's chief investment officer, called the building one of the top assets on the West Coast.
"It's Palo Alto," he said. "It's such a supply-constricted market. It's difficult to get entitlements and difficult to build."
Another property, University Circle in Palo Alto, sold in recent months for more than $600 a square foot. Palo Alto real estate is expensive partly because the city has the region's lowest number of vacancies and highest rents, even though many offices are older.
Lituchy said Jay Paul is discussing leases, and asking rents start at $3.75 a square foot, a regional high.
"It's difficult to find this product next to a research park, which is a beautiful campus that houses some of the world's leading tech companies," Lituchy said.
Jay Paul, founded in 1975, is one the Bay Area's larger developers and typically builds offices from scratch.
"This is one of the first projects that we saw that was built to our specifications, that we could have built ourselves," Lituchy said. "It was an opportunity we couldn't pass up."
Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5073.
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NYSE:HPQ, NYSE:A,
Source: San Jose Mercury News
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