Alexandria Real Estate Equities is in contract to sell its stake in a Menlo Park office complex that’s leased to Facebook.
The firm sold a 49 percent share of Menlo Gateway, a three-building office campus that spans 773,000 square feet, for $400.1 million, according to paperwork filed with the Securities and Exchange Commission.
Another render of Menlo Gateway (Bohannon)
The buyer wasn’t disclosed. The price, equivalent to $1,430 per square foot, includes a portion of the $141.3 million mortgage on the property that will be absorbed by the buyer. There’s already an executed purchase and sale agreement, although the deal is contingent on the lender approving the buyer’s assumption of the mortgage.
Alexandria paid $78 million for an 18 percent share of the project and announced plans to increase its stake, according to a 2017 report from the San Francisco Business Times. The company invested a total of $430 million in the complex. At the time of its investment, Alexandria’s joint venture partner, Bohannon Companies, had just finished the first phase of the project, a 206,869-square-foot building at 100 Independence Drive. The two other properties, located at 125 and 135 Constitution Drive, were yet to be completed at the time.
Alexandria, which is based in Pasadena, reported “historic demand” for its office and laboratory space between Oct. 1 and Nov. 19, according to the SEC filing. During that 49-day period, the company registered a total of 2.4 million square feet of leasing across its portfolio, including 230,952 square feet at 751 Gateway Boulevard in South San Francisco.
Alexandria is in talks to sell a Mission Bay portfolio for $399.3 million. The firm expects the deal to close in mid-December and is expecting a rate of return of 11.3 percent. The firm didn’t respond to a request for comment.