1388 Kifer Road

Sunnyvale, CA

This 3-story class A office building was vacant for 5 years before we acquired it in January 2019, which used to be an office for Yahoo!. The building is just under 90,000 sf on 3.56 acres of land ideally located in Sunnyvale, CA within close proximity to the Lawrence Caltrain Station and main highways 101 and 237.

Our investment thesis was to add value through either entitlements for multifamily or condo construction or a straightforward lease to generate cash flow. After our rigorous cost and benefit analysis and comprehensive discussions with the City of Sunnyvale, we ultimately decided that office was the highest and best use of the property given the good condition of the building and the lack of quality office space in the surrounding area.

Upon acquisition, we signed a lease with Intuitive Surgical, a Fortune 1000 company with a $70 billion market cap, and oversaw improvements to the building including installing new private offices and adding carpeting to the 2nd and 3rd floors, as well as repairing the parking lot, which added great value to the building.

In the summer of 2021, we negotiated a 5-year lease extension with Intuitive Surgical that extends to 2027, with an additional 5-year option extending to 2032. Shortly after the lease extension, we secured long term financing at a low cost of capital, which increased the value further.

The end result is that we acquired a vacant office building without cash flow in years at low purchase price, and stabilized it with a long term lease with stable cash flow from class A credit tenant, which created great value and is yielding excellent returns for our investors.