Los Altos office sells with big price jump to developer with visions of dense residential project
A Los Altos commercial property with the potential to become home to a dense residential space has traded hands for $48 million, nearly twice the amount it sold for about four years ago. Dutchints Development, a home builder that focuses on both Los Altos and Mountain View, purchased the 77,000-square-foot property at 5150 El Camino Real in Los Altos in an off-market transaction last month from Boston-based TA Realty Associates. The developer notes on its website that “this site has potential for high-density residential development in the future.”
The sale works out to about $623 per square foot, or about $12.63 million per acre for the 3.8-acre property. TA Realty bought the property in early 2014 for $25 million, or about $235 per square foot, but the company has since done some rehab on the property, originally built in 1984. Today, the property is more than 95 percent leased to companies like Palo Alto University, Richardson Oliver Law Group and Electric Imp.
Representatives for Los Altos-based Dutchints on Monday confirmed the purchase along with the company’s dreams of making the property into a high-density residential development. They declined, however, to dig into specific plans for the land, noting that they haven’t yet submitted any plans or proposals to the city of Los Altos yet.
But the concept of turning the land from a three-story development into something bigger won’t likely comes as a major shock to city officials. Los Alto’s current land use and zoning plans show the property, at the junction of Rengstorff Avenue and El Camino Real is envisioned to be what the city calls “Thoroughfare Commercial.” That zoning allows for retail, service and office space as well as residential units with a mix of uses and affordable housing, according to public documents.
It’s worth noting that even though the city’s general plan seems to be welcoming to a concept that would bring more density to the site, gaining entitlements for a new development can take years in Silicon Valley. Los Angeles-based George Smith Partners arranged a $41 million bridge loans for the acquisition, according to a recent press lease about the sale, which notes the transaction is the largest to date in the Dutchints portfolio.
“The team at George Smith Partners was able to assist me in creating a smooth acquisition process with a very sophisticated seller,” Vahe Tashjian, managing director for Dutchints, said in the release, adding that the deal, “has strengthened my position in the industry as our firm continues to seek larger assets from this and other institutional owners.”