Milpitas: Sale of Real Estate for $ 76 Million

Real Estate Company Mission West in the past two years, has been contracted to sell 23 acres in McCandless Road in Milpitas. Carl Berg, director of REIT of Cupertino, California, are interested in acquiring the rights to sell the property, said that because today's economy, believes that the business would be "complicated."

In the property there is a development of eight buildings and 427,000 square feet. Your buyer, unidentified, wants to make a residential redevelopment on the property, and sought the necessary approvals for construction to make this possible. The contract price is $ 76.5 million.

In February, Berg said he negotiated a sale of real estate along with the buyer to obtain an extension of 12 months to acquire the property and residential development. The buyer offered to pay $ 2 million for this extension, in addition to $ 10 million had already spent on development plans and scripts.

"We are analyzing their approval (development) and, if not close the deal, have agreed to surrender their plans and approvals, so that we can bring the property to market more easily," Berg said in February. "It's hard to know if anyone can do business in a market like this, but certainly have spent much money and they seem very committed to the project."

This week, Berg said that "almost closed the deal, but there were further delays." According to the director of Cupertino "scripts are ready, and there is no impact of the building permit, but in this market nothing is known for certain."

"We want to close the deal and, as it is being delayed by the municipality, further delaying its deadline. Hope you will fix it sometime in the first quarter, but everything changes every quarter, "said Berg.

Mission West owns four companies and management with a portfolio of about 8 million square feet in office buildings in Silicon Valley. At the end of the third quarter the vacancy rate for the company was 35.3 percent, or 2.8 million square feet, as compared to Silicon Valley's total vacancies of 16.7 percent, or five million square feet. The average monthly rent is $ 1.08 per square foot.

"Due to vacancies in the R & D properties in Silicon Valley", the company believes that "it will be unlikely to see a substantial recovery in the rental market before 2012.