A downtown Palo Alto office building has sold for a staggering $900 a square foot, the San Francisco Business Times reported.
The four-story, 72,000-square-foot building at 100 Hamilton Ave. was sold for $64 million by Embarcadero Capital Partners of Belmont to RREEF, the Deutsche Bank real estate investment management business, on behalf of an undisclosed institutional client, the paper said.
"This is a phenomenally high-value transaction," possibly among some of the highest per square foot in the United States, said Tommy Fehrenbach, economic development manager for the City of Palo Alto. The city will receive $3.30 per thousand dollars of the transaction in the form of a transfer tax.
However, a downtown Palo Alto developer and broker recalled a higher per-square-foot price paid for a downtown Palo Alto building during the 1990s tech bubble.
John Goldman, senior vice-president of Premier Properties, said a buyer paid $1,050 per square foot for the building at 151 University Ave. at that time.
Current tenants of 100 Hamilton include Bon Appetit Management and Palantir Technologies.
The building faces Alma Street, with office balconies overlooking the Caltrain tracks. It features two glass-ceilinged atriums, underground parking for 107 cars and a fitness center with adjoining locker room.
"The downtown Palo Alto location provides a high image and visibility along with great access to local dining and shopping," the seller said in a description of 100 Hamilton.
"Palo Alto is also known for its prestigious business environment and the building is in walking distance of the Caltrain."
Goldman described the current commercial real estate environment as "probably the strongest market we've ever seen downtown -- arguably stronger than it was during the late '90s because the quality of the (tenant) firms is stronger.
"Palo Alto has achieved an international reputation for start-ups," he said, describing two CEOs -- one from Australia and another from Pittsburgh -- who recently moved their entire companies here.
"If we had 20 more buildings, we could lease them," he said.
"The legal industry had a huge reshuffling in the recession and now the ones that are back are more aggressive, and the same with banking. Between those and the start-ups it's been unbelievable."