PALO ALTO — A big Bay Area investment group that seeks properties in hot tech markets around the country has bought an older office complex in Palo Alto, which itself has become a magnet lately for commercial real estate buyers.
Graymark Capital, through affiliate Fabian Way Owner, has bought a two-building office complex in Palo Alto, according to Santa Clara County documents that were filed on Dec. 23.
The office center, located at 3960 and 3980 Fabian Way in Palo Alto, totals 24,000 square feet and consists of two buildings.
San Francisco-based Graymark Capital paid $15.7 million for the buildings, the county records show.
The transaction was arranged through brokers Kalil Jenab, Ben Paul, and Steven Jenab of commercial real estate firm Cushman & Wakefield, and broker Brad Martin with Stetson Earhart, a commercial real estate firm.
“The life sciences industry is performing well overall, with this submarket also displaying increased demand particularly from auto tech, food tech, and artificial intelligence companies,” said Paul, an executive managing director with Cushman & Wakefield.
Graymark intends to spend millions of dollars in a wide-ranging renovation of the office buildings to bring modernize them and create amenities likely to entice a new tenant, according to Cushman & Wakefield.
“Graymark’s plans for this strategic location come at the right time and will fulfill a critical need for market-ready and flexible lab space deliverable very soon,” Paul said.
Investors appear to hunger for Palo Alto buildings in a big way. The deals suggest that Silicon Valley commercial real estate remains a hot ticket even in the face of coronavirus-linked economic uncertainties.
Among the major transactions for Palo Alto properties this year:
— On Dec. 30, private equity firm KKR and Drawbridge Real Estate teamed up to buy First Republic Center at 2100 El Camino Real in Palo Alto, paying $103.6 million for the mixed-use center that’s anchored by a new grocery store and a bank regional office.
— On Dec. 17, a group headed by Harrison Street and Bioscience Properties paid $72.7 million for six research and office buildings at and near the corner of Embarcardero Road and Embarcadero Way.
— On Dec. 4, Harrison Street paid $123 million for a building at 3380 Coyote Hill Road in prestigious Stanford Research Park that’s fully leased to VMware.
— In October, Alexandria Real Estate paid $40.5 million for two office buildings on Hillview Avenue near Arastradero Road in Stanford Research Park. Two months earlier, Alexandria paid $115.2 million for an office building totaling 100,000 square feet on Porter Drive in Stanford Research Park.
“Palo Alto and the surrounding Peninsula area have been a hotbed for life sciences activity,” said Kalil Jenab, a Cushman & Wakefield vice-chairman.