Cerberus Pays $50M for Santa Clara Land Approved for Homes

Cerberus Real Estate Capital Management has picked up 13.3 acres in Santa Clara approved for 1,100 homes for $50 million.

The New York-based investor bought the site approved for the apartment complex at 3905 Freedom Circle, the Silicon Valley Business Journal reported. The seller was Greystar Real Estate Partners, based in South Carolina.

The deal for the land southeast of Agnews Road and Mission College Boulevard along San Tomas Aquino Creek works out to $3.8 million per acre.

Greystar won approval last year to build a 1,100-unit complex with 2,000 square feet of shops, a 2-acre park and parking for 1,540 cars. The company bought the property from Intel in 2017 for $35 million, or $2.6 million per acre. A couple of years earlier, the developer had filed plans to build an office building and three apartment buildings on the site.The property is bordered on one side by San Tomas Aquino Creek; Intel’s headquarters sits on the other side of the creek.

Intel owned the property for 20 years after buying it from Informix, which had planned to build a 1-million-square-foot office campus, according to the Business Journal.

Cerberus is the real estate arm of Cerberus Capital Management, the largest shareholder of Albertsons Companies, the grocer that owns Safeway and Vons supermarkets, now in a $20 billion merger with Kroger.

It’s not clear what Cerberus plans to do with the Santa Clara land, as higher interest rates and soaring construction and labor costs have curtailed home construction across San Jose and the South Bay.

Developers didn’t break ground on any market-rate apartment project in Silicon Valley from January through June, according to CoStar. Meanwhile, the cost of building one unit of affordable housing in San Jose grew 24 percent to $938,700, from $757,900.

— Dana Bartholomew