Preylock Buys Office Building in Santa Clara for $183M

UPDATED: JUNE 20 at 1:25 P.M.:

Preylock Holdings has picked up a 244,900-square-foot office building occupied by Applied Materials in Santa Clara for $182.5 million.

Affiliates of the Los Angeles-based investor bought the six-story building at 3335 Scott Boulevard, near the semiconductor maker’s headquarters, the San Francisco Business Times reported. The seller was CBRE Investment Management, based in New York.

The price works out to $745 per square foot.

As part of the deal, Preylock borrowed $120.9 million from a PCCP debt fund through two promissory notes.

The building, developed by Menlo Equities in 2017, is inside The Campus @ 3333 office park. Applied, whose main campus lies to the south on the other side of Scott, dubs it Building 52.

Menlo, which leased the building to Aruba Networks, sold it in 2017 to CBRE and CalSTRS for $162.5 million. Last year, Applied subleased it from Aruba through 2028, with a five-year extension taking it to 2033.

The sale marks one of the largest deals of late in Silicon Valley, whose office market “has been in flux,” according to the Business Journal, with high vacancy rates, low occupancy and many companies looking to exit deals.

The vacancy rate of offices across the tech hub fell to 18.4 percent in the first quarter, from 18.8 percent at the end of last year, according to Cushman & Wakefield

Google, in a move to shed 1.4 million square feet of real estate in Silicon Valley, last month listed for sublease a 151,000-square-foot building at 620 National Avenue in Mountain View. The vacant offices, owned by Preylock, are available through May 2029.

Last August, Preylock secured a $581 million refinancing for eight Amazon.com-leased warehouses in Indiana, Pennsylvania, Ohio, Louisiana, North Dakota, New Mexico, Arkansas and Alabama.Founded in 2016 by Brett Lipman and Steve Shokouhi, Preylock has amassed $4 billion of assets under management — mostly office and industrial properties, according to its website. In Los Gatos, the firm owns part of the Netflix headquarters campus at 131 Albright Way.

Clarification: Previous story did not include information about Applied Materials’ lease extension to 2033 or the Preylock’s $581 million loan was a refinancing for the eight warehouses.