News Release
AMSTAR GROUP MARKS RETURN TO BAY AREA WITH $75.1-MILLION INVESTMENT ACQUISITION OF OFFICE CAMPUS ON PRIME SITE IN SAN JOSE
Denver-Based Real Estate Private Equity Firm Acquires Montague Park, 417,500-Square-Foot Campus on 23.6-Acre Site, Plans Repositioning Program
SAN JOSE (Aug. 24, 2005) – Amstar Group has re-entered the Bay Area real estate market with a $75.1-million investment transaction of an office campus located on Zanker Rd. in San Jose. The Denver-based real estate private equity firm completed the all-cash acquisition of Montague Park, a five-building property encompassing 417,532 square feet of Class A office and R&D space from Montague LLC, an entity of Menlo Equities.
“We have more than $300 million in cash available now for real estate investments, and we plan on deploying approximately $1.5 billion in total investments over the next two to three years. Our acquisition of Montague Park backs this message up with action, and reestablishes our brand name in the San Francisco Bay Area,” said Gabe L. Finke, CEO of Amstar Group.
According to Finke, Amstar Group previously owned 115 Sansome in San Francisco, which was sold in 2001.
Amstar Group views Montague Park as a Class A office/lab space asset that is perfectly positioned to be the next highly desired product in the Silicon Valley simply because the Class A+ product is being quickly absorbed. The company’s strategy is to implement an aggressive leasing effort and upgrade the appearance of the campus in order to secure deals in this improving office market.
“The acquisition of Montague Park allows Amstar to return to the Bay area market, a market we have sold out of over the last couple years, as well as capitalize on a value-added investment opportunity,” said D. Scott Gibler, Executive Director at Amstar Group. “The acquisition of this asset in this market at this time perfectly matches Amstar’s investment strategy where we search out opportunities that are well located in improving office markets that we can add value through aggressive management and leasing.”
Mark Ziemendorf of Cornish & Carey’s Santa Clara office represented the seller in the transaction. Amstar Group represented itself in the acquisition.
“Today, investor interest is at record-highs, there are low interest rates and we’re experiencing improving market conditions all of which combines to create challenges for companies seeking to buy properties at prices that pencil,” said Ziemendorf. “The fact that Amstar Group was in a position to make an all-cash offer certainly positively impacted the certainty of closing of this transaction. And they have built a solid 20-year reputation for buying real estate that is well-located but needs a bit of polishing.”
Montague Park is currently approximately 61% leased, primarily occupied by Ultratech, Inc. and Pillar Data Systems.The campus is situated on a 23.6-acre crescent-shaped site and offers buildings ranging in size from approximately 75,000 square feet to nearly 100,000 square feet. Each building is located on an individual parcel.
Originally developed by a joint venture of Sutter Hill and The Equitable in two phases with the first three buildings completed in 1986 and the last two in 1989 and 1990, Montague Park remains one of the premiere high-quality office/R&D projects in the Silicon Valley today. Each building has a significant water feature at the main entrance, tropical landscaping, exceptional tenant signage, and a second floor exterior balcony. Surface parking for 1,519 vehicles provides a parking ratio of 3.64 cars per 1,000 square feet of rented space. Loading capabilities are provided for each building via one grade-level and one dock-high door.
Amstar Group continues to be an active private equity investor in key domestic real estate markets. Over the next few years, Amstar plans to place approximately $1.5 billion in leveraged equity investments. Currently, the company has approximately $300 million of its own discretionary equity available for investment.
In 2004, Amstar completed or placed under contract more than $1 billion in transaction activity, including acquisitions, dispositions, and developments. This involved more than 2.8 million square feet of office space, 696 multi-family units and 791 hotel rooms. So far in 2005, the company has competed investment transactions totaling more than $550 million, having recently acquired properties such as an office building in Los Angeles, an office building in Baltimore, two multi-family development sites in Los Angeles, a historic office property in Houston, and a hotel in Alexandria, Va.
About Amstar Group
Established in 1987, Amstar Group is one of the leading real estate private equity firms in the United States. Headquartered in Denver, Colorado, the company has acquired and developed more than 75 properties valued at $2 billion. Its current portfolio includes a diversified mix of office, multifamily and hospitality holdings. The company currently has holdings in California, Florida, Texas, Philadelphia, Chicago, Denver, Phoenix, and Washington, D.C. For more information about Amstar Group visit the company’s website at www.amstargroup.com.