The Landing at GREAT AMERICA S a n t a C l a r a, C a l i f o r n i a E X E C U T I V E S U M M A R Y
Cassidy Turley has been retained as exclusive advisor to market for sale The Landing at Great America located at 5450 5480 Great America Parkway in Santa Clara, California (the Property ). The current improvements consist of three steel-frame, Class A office/r&d buildings totaling 307,050 square feet built above podium parking. The existing buildings are 100% leased to tech giants Oracle and Dell, and are home to Dell s Silicon Valley research and development headquarters. In addition to the existing improvements, the Property contains a 4 acre development pad with entitlement approvals from the City of Santa Clara to build an additional 221,173 square feet. The fee simple interest in the entire Property is being offered for sale without an asking price, on an all cash basis. Situated immediately off Highway 237, this highly visible project provides its tenants a prominent image, unparalleled freeway access, subterranean parking, abundant glass line and a Class A modern architectural feel in a campus environment. The Property enjoys a prime position on Great America Parkway, one of the most prestigious thoroughfares in Santa Clara and one of the most active tech clusters in Silicon Valley. Prominent neighbors such as Marvell, Ericsson, Cisco, Yahoo!, Brocade, Polycom and Broadcom drive area demand. This technology hub will only increase in appeal with the addition of the new San Francisco 49ers football stadium being built at the intersection of Tasman Drive & Great America Parkway, less than one mile from the Property. SITE SUMMARY Address RSF Parcel (acres) FAR Current Improvements 5450-5480 Great America Pkwy 307,050 8.13 0.866 Additional Entitlements 5490 Great America Pkwy 221,173 4.16 1.221 Total: 528,223 12.29 0.986 BUILDING SUMMARY Property Address Total RSF % Project Occupancy Floors Parking Ratio 5450 Great America Pkwy 153,584 50% 100% leased 4 3.1 / 1,000 to Dell 5470 Great America Pkwy 66,137 22% 100% leased 2 3.1 / 1,000 to Oracle 5480 Great America Pkwy 87,329 28% 100% leased to Dell 3 3.1 / 1,000 Total - Existing Improvements 307,050 100% 100% 1
INVESTMENT HIGHLIGHTS: Univ. of CaliforniaBerkeley MARIN COUNTY St. Mary's Coll. of CA BR. BAY GOLDEN GATE BR. SAN FRANCISCO COUNTY Oakland CONTRA COSTA COUNTY Univ. of San Francisco San Francisco Oakland International Airport San Francisco State Univ. Cal. State UniversityEast Bay San Francisco International Airport SAN MAT A C. BR EO N BR. SAN MATEO COUNTY RT BA O DU M Premier Silicon Valley location: Santa Clara is home to some of the most prominent tech companies in the world, including Intel, Applied Materials and Nvidia. Santa Clara enjoys a rich tradition in the heart of the in-fill market and is known as one of the most business-friendly cities in Silicon Valley. Tenants are attracted to Santa Clara because of the ease of doing business with the city and because of Silicon Valley Power, the city-owned electrical utility that provides power at rates approximately 35% less than other Silicon Valley cities that are tied to the PG&E grid. The Great America area in particular is rich with amenities, as several major hotel brands have locations here including Marriott, Hilton and Westin. Additionally, the Santa Clara Convention Center sits at the intersection of Great America Parkway and Tasman Drive. The new San Francisco 49ers stadium will be built along Tasman Drive only a few hundred yards from Great America Parkway and is expected to be completed in 2014. 100% leased to investment grade tenants: 5450 and 5480 Great America Parkway are 100% leased to Dell Incorporated (Nasdaq: DELL) through August 2021. Dell s leasehold represents 78% of the project or 240,913 square feet. For fiscal year 2012, Dell generated more than $62.1 billion in revenues with nearly $3.5 billion in net income. Dell maintains a market capitalization of more than $20 billion and its corporate debt is rated A- by Standard & Poor s. 5470 Great America Parkway is 100% leased to Oracle Corporation (Nasdaq: ORCL) through December 2014, which accounts for 22% of the project or 66,137 square feet. For fiscal year 2012, Oracle generated revenues of over $37.1 billion with a net income of $9.98 billion. Oracle debt is rated A+ credit by Standard & Poor s and currently maintains a market capitalization of over $140 billion. Oracle has a sublease in place with Arista Networks, a leading cloud networking company. THE L ANDING AT GREAT AMERICA Moffett Federal Airfield Stanford University San Jose Intl. Airport Santa Clara Univ. S A N T San Jose San Jose State University A C R S U Z M T S West Valley College. TENANT SUMMARY Tenant Dell Incorporated Oracle Incorporated (Subtenant: Arista) Building 5450/5480 - Entire 5470 - Entire RSF 240,913 66,137 307,050 Project Share 78% 22% 100% Ticker Symbol Nasdaq: DELL Nasdaq: ORCL Credit Rating S&P/Moody s A- / A2 A+ / A1 Annual Revenue $Billion $62.1 $37.1 Lease Expiration 8/31/2021 12/31/2014 2
Market Dynamics / Strength in the Class A Market: The rapidly changing dynamics in the large-block, Class A market along the Highway 101 corridor have been a driving factor for activity and absorption in Silicon Valley during the past 18 months. A major reason behind these trends has been the decision by today s tenants, who are competing both to attract and retain high-caliber employees, to target Class A space as part of their corporate growth strategies. The statistical change is significant: at the beginning of 2011 there were 24 listings totaling 6 million square feet of large-block, existing class A space; currently, the available number of listings has dwindled to 12, with approximately 2 million feet of space remaining. The Highway 101 corridor from Santa Clara to Redwood City has experienced the greatest amount of absorption and is currently in the greatest demand. Approximately 60% of the 10 million feet of demand that Cassidy Turley is tracking for the Silicon Valley is looking to locate in this corridor. The result of the demand/ supply dynamics is that large-block Class A space, especially in desirable markets like Santa Clara, is the strongest asset class in Silicon Valley, and the market continues to strengthen. SILICON VALLEY CLASS A OFFICE MARKET Q1 2012 Q1 2011 Available Square Feet 3,978,212 5,767,679 Overall Vacancy 13.9% 20.2% Net Absorption trailing 12 months 2,133,007 1,844,203 Strong current cash flow with upside potential: The Landing at Great America provides investors the opportunity to capitalize on the dynamic Silicon Valley office/r&d market while maintaining strong cash flow from credit tenants. The near-term rollover of Oracle s lease provides an opportunity to significantly increase the Property s NOI. At the same time, the duration of the Dell lease provides long-term stability and security to the investment. 3
The Landing at Great America provides investors the opportunity to capitalize on the dynamic Silicon Valley office/r&d market while maintaining strong cash flow from credit tenants. 4
N 15 SITE OF FUTURE 49ERS STADIUM 1 13 3 4 11 5 10 6 9 16 12 2 8 7 THE LANDING AT GREAT AMERICA 14 GREAT AMERICA PKWY 1 9 2 10 3 11 237 4 12 5 13 6 14 7 15 5 8 16
Modern buildings with excellent curb appeal: With a modern architectural design, The Landing at Great America enjoys prominent identity along Highway 237 and Great America Parkway. Originally developed as part of 3Com s corporate headquarters in 1999, the buildings were designed by Studios Architecture and are of steel-frame construction with extensive glassline. The interiors are comprised of high-end office improvements with 100% dropped ceilings. Dell is estimated to have spent more than $110 per square foot on its recent interior build-out of 5480 Great America Parkway, with similar improvements underway in the 5450 building. The Property s podium construction helps enhance its curb appeal. On-site amenities include subterranean parking, a café, and an outdoor plaza. Institutional ownership: The Landing at Great America has been owned by a fund advised by Prudential Real Estate Investors since 2006. Future on-site development: The development agreement in place with the City of Santa Clara allows for the construction of a 249,305 square foot Class A building along the north side of the Property facing Highway 237. The building s LEED certified design will provide exceptional efficiency and versatility, ideal for a corporate headquarters or large user. The development provides further opportunity to capitalize on projected double digit rent increases and continued decline in the amount of large blocks of available space in the competitive market. The development plan also calls for the expansion of the site s parking. One of the world s most dynamic economies: Fueled by technological innovation, the Bay Area has one of the strongest economies in the world. The region has consistently received more venture capital dollars than any other region for nearly two decades. Bay Area tech companies are expected to boost their total workforce by 30,000 people during 2012. The unemployment rate in the City of Santa Clara has fallen from 8.8% to 7.5% over the past twelve months, and remains well below the California statewide unemployment rate of 10.9%. Wide-ranging transportation access: The Property lies immediately off Highway 237, along Great America Parkway. This location provides quick access to both Highway 101 and Interstate 880, two major transportation arteries serving the South Bay. Additionally the Lawrence, Central, and Montague Expressways are in close proximity to the Property and serve as key thoroughfares for the Silicon Valley. The San Jose International Airport is just minutes away from the Property. There is Light Rail, CalTrain and ACE train access within blocks of The Landing at Great America, a key factor for users looking to take advantage of regional mass transit. In addition to its transportation access, The Landing at Great America is conveniently located near a variety of retail amenities, such as the Mercado Santa Clara shopping center, which includes an AMC Theatres, Jamba Juice, Starbucks, and In-N-Out Burger. 6
The Landing at GREAT AMERICA S a n t a C l a r a, C a l i f o r n i a Investment Contacts Debt & Equity Finance Contact STEVE HERMANN Executive Managing Director 415.677.0465 steve.hermann@ctbt.com Lic.01352679 BOB GILLEY Executive Managing Director 415.677.0468 bob.gilley@ctbt.com Lic.01084869 ERIC FOX Partner 408.615.3469 eric.fox@cbt.com Lic.01209035 DAVE CHRISTENSEN Senior Vice President 415.568.3414 dchristensen@ctbt.com Lic.00918066 201 California Street, Suite 800 San Francisco, CA 94111 Tel 415.781.8100 Fax 415-956-3381 Cassidy Turley Northern California www.ctbt.com