Los Angeles-based Hudson Pacific Properties announced that it has sold the Bayhill Office Center in San Bruno, California to online video giant YouTube in an all-cash, off-market transaction worth $215.0 million, or about $388 per square foot. The 554,328-square-foot Class A office campus is adjacent to YouTube's existing headquarters in San Bruno; the company has yet not announced its plans for the new space, but has been tweaking its business strategy. Hudson Pacific originally acquired the complex as part of the San Francisco Peninsula and Silicon Valley portfolio purchased in April 2015 from Blackstone Group LP.
"Our sale of Bayhill Office Center highlights continued strong demand from the world's leading technology companies for high-quality office space along the Peninsula," said Victor Coleman, Chairman and CEO of Hudson Pacific Properties in a press release. "The asset was non-core to our portfolio, and we sold it at a premium to our original purchase price allocation as part of the Blackstone portfolio acquisition."
"This deal indicates the belief that digital media and new digital content, as opposed to movie and TV studio content, is where entertainment and information is heading," said Chris Shipley, a Redwood City-based independent analyst and consultant for the innovation and media sectors.
Bayhill Office Center is currently full and existing tenants include Oracle, Walmart Labs and other, smaller companies. It is unclear if prices will go up for tenants, or whether YouTube, a unit of Alphabet Inc., wants a good portion of the space for themselves. For more news and information visit Blumberg Partners.
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