Big real estate deal: Investors grab Palo Alto office building

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PALO ALTO — A big investor that hungers for choice buildings in tech hub Palo Alto has gobbled up a large office complex in the prestigious Stanford Research Park area.

Alexandria Real Estate has bought an office building in Palo Alto at the corner of Hanover Street and California Avenue, according to Santa Clara County property records filed on April 29.

Over a period of about three years, Alexandria Real Estate has been on a shopping spree for office buildings in Palo Alto that now totals $926 million, this news organization’s review of county documents shows.

Alexandria Real Estate, acting through an affiliate called ARE San Francisco No. 91, paid $71.4 million for the office building, the public records show.

The building, located at 2475 Hanover St. in Palo Alto, totals 84,000 square feet, according to the LoopNet commercial property service.

The first of the Alexandria purchases in Palo Alto in recent years occurred in January 2018, when the company paid $136 million for the Embarcadero Place office complex on Geng Road. About a year later, Alexandria paid $100.3 million for an office building at 3170 Porter Drive that’s leased to Jazz Pharmaceuticals. Then in August 2019, Alexandria paid $97 million for an office building leased to Stanford Health next door at 3160 Porter.

In December 2019, Alexandria paid $291 million for a vast property that contains several aging buildings whose occupant and owner for decades has been SSL and its predecessor, Space Systems Loral, a famed defense contractor. These buildings are at 3825 and 3875 Fabian Way.

In February 2020, Alexandria paid $75.9 million for Palo Alto office buildings with addresses of 3412 and 3330 Hillview Ave. SAP and Kirkland & Lewis law firm are listed as tenants there.

In August 2020, Alexandria paid $115.2 million for another Porter Drive office building. Jazz Pharmaceuticals is the tenant. In October 2020, Alexandria Real Estate paid $40.5 million for two Hillview Drive office buildings whose tenant is SAP.