PALO ALTO — A real estate group headed by big-time investors in New York City and the Bay Area has bought a prominent grocery, retail, and office complex in a choice section of Palo Alto for nearly $104 million, according to property documents.
An affiliate connected to KKR, a major private equity firm, and Drawbridge Real Estate, has bought First Republic Center, a complex located at 2100 El Camino Real in Palo Alto, documents filed on Dec. 30 with officials in Santa Clara County show.
The buyers paid $103.6 million for the mixed-use center, the county records show. The complex fronts on El Camino Real between Oxford Avenue and College Avenue.
The principal tenants in the complex, which totals 58,000 square feet, are a regional office of First Republic Bank and a just-opened specialty grocer called Real Produce International Market.
The buyers, operating through affiliate KRE El Camino Real Owner, obtained a $60 million loan from DBR Investments, a New York City-based subsidiary of Deutsche Bank, the global financial services behemoth. Michael Whyte, director of real estate for KKR, was the responsible party who signed the loan documents on behalf of the buying group that borrowed the money, Santa Clara County property records show.
The deal appears to represent a major success story — and profit — for the sellers, a venture of Palo Alto-based developer Blox Ventures and New York City-based realty investment firm Angelo, Gordon & Co.
In 2018, Blox and Angelo, Gordon teamed up to pay $78.3 million in cash for the complex. That means the latest price for the complex points to a 32% gain in the value of the property since it was previously purchased.
The Hayes Group, SWA Group
One of the major successes of the sellers was landing a well-respected grocery operator to fill a long-vacant space on the ground floor of the complex.
“The partnership worked to ensure long-term leases with its tenancy for the future success of the property and the businesses,” Blox and Angelo, Gordon said in comments describing their efforts ahead of the property purchase.
Real Produce International Market in November leased 11,000 square feet in the Palo Alto complex.
“It has always been our goal to thoughtfully improve this asset to best serve the community and ensure the buyer shares the same commitment,” said Jason Oberman, chief executive officer of Blox Ventures.