Oaktree Takes Haircut on Silicon Valley Office Complex

PSAI Realty Partners has picked up three office buildings in Campbell for $54 million — a 62 percent discount from an investor buy-in six years ago.

An affiliate of the San Francisco-based investor bought an 18-story, 119,300-square-foot tower, a 10-story, 119,000-square-foot highrise and six-story, 126,700-square-foot building at 1901 South Bascom Avenue, southwest of San Jose, the Silicon Valley Business Journal reported.

The sellers were Ellis Partners, based in San Francisco, and Los Angeles-based Oaktree Capital Management.

The deal for the 365,000 square feet of offices built in the 1970s works out to $148 per square foot. Eastdil Secured represented the sellers in the deal.

The sale marks an $87.5 million differential from what Oaktree had invested in the office campus six years earlier.

In 2019, Oaktree paid $141.5 million, or $388 per square foot, for a majority stake in the former Pruneyard office campus, partially owned by Ellis, next to the Pruneyard Shopping Center.

At the same time, Ellis and Fortress Investment Group spun off the 258,000-square-foot shopping center for $212.5 million and a 169-room Doubletree by Hilton hotel next door for $59.1 million.

In 2014, Ellis and Fortress had bought the entire 27-acre Pruneyard office, retail and hotel shebang for $280 million.

PSAI Realty Partners, co-founded by Peter Sullivan in 2006, has invested heavily throughout the Bay Area, but lacks an official website. In 2020, it was officially renamed PSAI Realty Partners IV, according to state business records, now managed by Sullivan, Michael Feldman and Erik Foraker.

In October PSAI Realty bought a 362,400-square-foot office complex in Walnut Creek for $167 million, or $477 per square foot, a premium price for the Bay Area.— Dana Bartholomew