Bay Area investors have paid more than $100 million for a nearly 200,000-square-foot building in San Jose leased to a startup manufacturer of high-tech batteries.
Lafayette-based Cortese Properties and La Fiesta Square bought the 196,600-square-foot building at 1710 Automation Parkway for $103.8 million, the San Jose Mercury News reported. The seller was undisclosed.
The building was leased in December by QuantumScape, a solid state battery startup which manufactures lightweight lithium-metal batteries. The company lease is set to expire in September 2032.
The purchaser reflects high demand for industrial buildings in Silicon Valley.
Houston’s Hines, Indianapolis’ Duke Realty and Chicago’s Bridge Industrial aim to build more than 1.7 million square feet combined in north and south San Jose.
While North San Jose has an established industrial market with a 2 percent vacancy rate — the lowest in Silicon Valley at the end of last year, according to CBRE — the city’s southern area has historically been known for its research and high-tech companies.
The investor group that bought the Automation Parkway building in northeast San Jose is led by Stephen Cortese and Ann Cortese, principal executives with Cortese Properties and La Fiesta Square, a shopping center in Lafayette, according to county and state records. It obtained a $45 million loan from Wells Fargo Bank to help finance the purchase of the plant.
QuantumScape, founded in 2010, has more than 600 employees and $2 billion in capital investment. It initiated a public offering in November 2020 that raised $680 million and placed a value on the company at $3.3 billion.
The startup, backed by Volkswagen AG and Bill Gates, said its ability to use iron-based chemistries instead of nickel for battery components could help it mitigate soaring costs for raw materials as it tries to scale its technology.
Commercial production is about two years away, it said in a recent regulatory filing.
“QuantumScape is on a mission to transform energy storage with solid-state lithium-metal battery technology,” QuantumScape says on its website. “The company’s next-generation batteries are designed to enable longer range, faster charging and enhanced safety in electric vehicles.”
[San Jose Mercury News] – Dana Bartholomew
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