LA developer Hudson Pacific sells office to YouTube for $215M
West L.A. real estate investment trust Hudson Pacific Properties is seeing strong returns up north.
The firm sold the Bayhill Office Center at 999-1111 Bayhill Drive in San Bruno to YouTube for $215 million, or $388 per square foot, in an all-cash, off-market sale that closed today.
Hudson Pacific, which owns and is developing office properties in L.A. and also has a strong presence in Northern California and the Pacific Northwest, acquired the 554,328-square-foot Class A office campus in San Mateo County as part of the San Francisco Peninsula and Silicon Valley portfolio it purchased in April 2015 from Blackstone. That portfolio consists of 26 office buildings totaling 8.2 million square feet of space, and two development parcels. It cost Hudson $3.5 billion.
Victor Coleman, CEO of Hudson Pacific, said the firm did not break out the individual values of each asset in the portfolio, but according to the Silicon Valley Business Journal, it sold for only $554, 337. Coleman stressed that the Bayhill property was “sold at a premium.”
“The (Bayhill office) asset was non-core to our portfolio,” Coleman said. “YouTube paid in cash and there is no debt on the property.”
The campus is adjacent to YouTube’s headquarters in San Bruno at 900, 901 and 1000 Cherry Avenue. It’s not clear exactly how YouTube will expand into the Bayhill property it now owns, given that it’s fully leased by tenants that include Oracle. Those tenants may be displaced by their new landlord when their current leases expire.
YouTube is owned by Alphabet Inc., Google’s holding company. A spokesperson for Google declined to comment on the purchase.
Hudson Pacific is also busy locally, developing the remainder of the 30 acres of studio space it acquired in Hollywood during the downturn – 200,000 square feet of which has been pre-leased by Netflix. The REIT is also focused on Culver City, where it is developing a mixed-use office property, and Downtown’s Arts District, where it bought four properties over the course of the past year, including the old Coca-Cola manufacturing plant at 963 E. Fourth Street.
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