Kilroy Realty Corporation today announced that it has acquired a fully entitled, 12-acre land site in Sunnyvale, California where it will develop, own and manage a 587,000-square-foot office complex for LinkedIn Corporation, operator of the world’s largest professional network on the internet, under a 12-year lease agreement.
KRC will invest approximately $315 million to develop a state-of-the-art office project, which will feature three mid-rise Class A office buildings and a parking structure, all designed and pre-certified to meet LEED silver requirements. The development is located along two major arteries, Maude and Mathilda Avenues, bisecting Sunnyvale and just one mile from Caltrain, providing both high visibility in this prominent Silicon Valley submarket and convenient access to multiple forms of transportation, including the nearby Central Expressway. Sunnyvale, with a Class A total vacancy rate of less than 5%, is a highly sought after location for tenants seeking to cluster around major technology firms, including Apple, Yahoo!, AMD and now, LinkedIn.
KRC expects to complete the LinkedIn complex in the second half of 2014 adding to the company’s under construction Bay Area development pipeline, which now includes four projects aggregating approximately 1.5 million square feet. The four projects represent a total estimated investment of approximately $800 million and are all 100% pre-leased to leading technology companies, including salesforce.com, Synopsys, and Audience, in addition to LinkedIn.
“We’re delighted to partner with LinkedIn in the creation of a new LEED-certified office facility,” said John Kilroy, Jr., KRC’s president and chief executive officer. “This is another opportunity for us to create significant value for our shareholders through the development of the highest quality real estate at superior returns.”
Eli Khouri, KRC’s chief investment officer, said: “This transaction is the fourth of its kind in 2012 where KRC has agreed to develop, from the ground up, new state-of-the-art buildings for leading technology companies in the Bay Area. These types of opportunities have arisen from KRC’s strategy of acquiring superior locations in the best submarkets where we can offer superb space to the region’s premier tenants.”
“We were highly impressed with all the professionals we dealt with at LinkedIn, and we look forward to our continued collaboration in delivering their new office location,” said Mike Sanford, senior vice president and head of KRC’s northern California region.
Sherman Chan and Bob Steinbock, both senior vice presidents at CBRE, acted as investment brokers in the transaction.