Shoe Palace has sold its headquarters and distribution warehouse in Morgan Hill for $45 million and planted its feet next door in a new building twice the size.
The retail footwear chain sold its 258,122-square-foot headquarters and warehouse at 755 Jarvis Dr., just south of the 101 Freeway and Cochrane Road, the Silicon Business Journal reported. The deal came out to $174 per foot.
The buyer was a joint venture between Ridge Capital Investors, based in San Francisco, and Westbrook Partners, based in Florida.
Shoe Palace, founded by four Mersho brothers in San Jose in 1993, bought the property for $12 million in 2013. It had listed it for $53 million in 2020.
The sale comes 18 months after British retailer JD Sports Fashion bought Shoe Palace for $681 million. The athletic shoe and apparel chain has 167 stores, mostly in California.
It moved into a new 503,400-square-foot headquarters and warehouse at 745 Jarvis Dr., next door. The new facility, under construction since late 2019, was completed last week.
The vacancy rate for such industrial properties in Silicon Valley is 2.4 percent, according to CBRE, and demand exceeds supply by 1.2 million square feet.
Ridge Capital has purchased five Bay Area properties in the last eight months, including the Shoe Palace site, for a total of $230 million, according to CBRE. The joint venture plans to renovate the 25-year-old building and lease it for about $1.25 per square foot per month.
Brokerage CBRE represented both parties in the sale, with Brian Matteoni, Scott Prosser, Joe Moriarty, Jack DePuy, Rebecca Perlmutter, Brian Matteoni and Chip Sutherland from its Silicon Valley office working on the deal.
Mike Walker and Brad Zampa from CBRE’s finance team also arranged a $39.5 million, three-year loan to the joint venture to buy the property.
[Silicon Valley Business Journal] – Dana Bartholomew
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