Big San Jose tech park lands new owner that eyes wide-ranging revamp
A veteran real estate firm has bought a north San Jose tech and industrial complex.
SAN JOSE — A veteran real estate firm has bought a north San Jose tech and industrial complex in a deal that shows investors still hunger for commercial real estate properties at attractive prices.
Junction Business Park, a two-building complex at the corner of Junction Avenue and Hartog Drive in the key tech and innovation hub of north San Jose, has been bought for $30.7 million, according to documents filed on Dec. 22 with the Santa Clara County Recorder’s Office.
BKM Capital Partners, a real estate investment firm based in the Orange County city of Newport Beach, bought the industrial and tech park from Stockbridge Partners, county and state documents show.
Cushman & Wakefield commercial real estate brokers Jeff Chiate, Rick Ellison, Scott Prosser, Steve Hermann, Jack Depuy, Mike Adey, Brad Brandenburg, and Matt Leupold arranged the property transaction.
BKM Capital obtained a loan of $20.6 million from First-Citizens Bank & Trust Co. at the time of the property purchase, according to the Santa Clara County public records.
“Like with all of our acquisitions, Junction Business Park aligns perfectly with our proven investment strategy,” said Brian Malliet, BKM Capital’s chief executive officer. “We identify a well-located light industrial asset, buy it at a significant discount to replacement cost, and then leverage our expertise and resources to maximize its value.”
In the case of Junction Business Park, the new owner seeks significant upgrades to the property, whose addresses consist of 1911 through 1943 Hartog Drive and 1914 through 1968 Junction Avenue.
“BKM is implementing a $1 million capital improvement plan to improve the asset’s efficiency and appeal, bringing it up to Class-A standards,” the company stated on Monday.
The new owner has budgeted an additional $873,000 for improvements to the interiors of the spaces in the business park.
With the backdrop of a wobbly commercial real estate market in the Bay Area in the wake of the coronavirus, the new owner is betting that its planned improvements and upgrades can ensure the property is a success story.
“We’re confident that once we complete our upgrades and leasing plans, Junction Business Park will be a highly sought-after location for the market’s top light industrial tenants,” said Brett Turner, BKM Capital’s senior managing director of acquisitions and dispositions.