JV Acquires Silicon Valley Mixed-Use Property for $55M

Stevens Creek Executive Park. Image courtesy of JLL

Machine Investment Group, a newly launched New York-based real estate investment platform focused on opportunistic, distressed and special situations, acquired Stevens Creek Executive Park, a five-building, mixed-use property in San Jose, Calif., for $54.5 million in a joint venture with Miramar Capital Advisors.

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JLL Capital Markets arranged $33.3 million in acquisition financing for Machine and Miramar. California Bank and Trust provided the three-year, interest-only loan. The San Francisco JLL Capital Markets Debt Placement team was led by Alex Witt, Brandon Roth and Spencer Bergthold. Witt said in a prepared statement that despite the uncertainty caused by the COVID-19 crisis, California Bank and Trust delivered accretive financing for the acquisition. The fact that the joint venture was able to obtain non-recourse bank financing at a time of limited liquidity for similar assets, speaks to the quality of the sponsors’ reputation and their business plan, he added.

Machine’s first transaction

The purchase of the fully entitled 9.23-acre site at 4300-4400 Stevens Creek Blvd. was the first transaction for Machine, led by Andy Kwon and Eric Rosenthal, previously senior leaders of real estate investing at Garrison Investment Group. Rosenthal said in prepared remarks Machine will focus on opportunities within all major and specialty property types located in emerging and existing institutional markets. He added the properties should be in growth markets with diverse demand generators offering attractive yields and advantageous entry points.

Stevens Creek Executive Park is a multi-tenant property with about 137,500 square feet of office and 28,000 square feet of retail space. The unidentified previous owner had received entitlements to build 582 multifamily units, 10,000 square feet of retail and additional office space. The site is centrally located in San Jose within the Cupertino Union School District and less than 2 miles from both Apple’s global headquarters and the Santana Row luxury shopping district. The property also has excellent transportation access.

Kwon said in a prepared statement the team’s first acquisition is consistent with their track record at Garrison where they successfully pursued middle-market investment opportunities. During their time at Garrison, Kwon and Rosenthal personally invested more than $1.5 billion of equity together. He said Machine and Miramar purchased the San Jose property at an attractive basis and are considering possibilities for its best use, including both market-rate and affordable multifamily residential as well as large-scale mixed-use redevelopment. Kwon pointed to the favorable demographics in San Jose, which has one of the fastest-growing economies in the U.S. and continues to attract high-paying jobs.