Los Angeles based Hudson Pacific Properties announced this week that it had sold the Bay Park Plaza office complex outside of San Francisco in Burlingame, California to H&Q Asia Pacific for $90 million in an all-cash transaction. H&Q Asia Pacific is an Asian private equity firm founded in 1986 by Ta-lin Hsu as a branch of the investment bank Hambrecht & Quist. Eastdil Secured represented Hudson Pacific and Alain Pinel Realtors represented H&Q Asia Pacific in the transaction.
The property was part of the larger San Francisco Peninsula and Silicon Valley portfolio, which Hudson Pacific had acquired from Blackstone Real Estate Partners V and VI, in a stock-and-cash deal worth $3.5 billion, in the first half of 2015, according to a Zachs report. Hudson Pacific said that it's using proceeds from the transaction to pay-down a portion of its $550 million two-year term facility.
"By selling Bay Park Plaza, we're disposing of a non-strategic asset at a premium to our original purchase price allocation as part of the Blackstone portfolio," said Victor Coleman, Chairman and CEO of Hudson Pacific Properties. "The transaction highlights our ability to generate additional value from these newly acquired properties, and is another sign of the Bay Area economy's strength."
The 260,183-square-foot Bay Park Plaza office property (renamed GIC Burlingame Bay) includes two Class A office buildings at 555 Airport Boulevard and 577 Airport Boulevard in Burlingame on a 13-acrew waterfront site two miles away from the San Francisco International Airport. According to a press release from Hudson Pacific, Virgin America occupies the majority of 555 Airport Boulevard, which serves as its corporate headquarters, though the overall property occupancy rate was not disclosed. H&Q Asia Pacific noted in its press release on the transaction that the property will be a hub for technology companies offering its members and tenants the opportunity to "benefit from the disruptive technology innovation, entrepreneurial experience, and human capital of the Silicon Valley through a platform of advisory services, programs, and commercial and strategic partnership opportunities."
Dr. Ta-lin Hsu said, "I am very pleased to announce the next step in the development of the Global Innovation Center. This project represents the culmination of 30 years of cross-border technology investments by H&QAP and our portfolio of relationships with governments, technology parks, leading technology companies, financial and academic institutions and technology service providers. Our goal is to create a unique ecosystem to foster innovation and provide growing technology companies with access to crucial relationships and value-added services. H&QAP plans to continue exploring opportunities to develop Global Innovation Centers in other technology centers around the world."
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