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SAN JOSE, CA—Boston Properties, Inc. and Toronto-based Canada Pension Plan Investment Board have formed a joint venture to develop a 1.1-million square-foot office campus near Diridon Station in Downtown San Jose.
The two firms report that construction on the three-building office campus could begin in the next six months.
CPPIB will have a 45% ownership interest in the Platform 16 joint venture. Boston Properties will retain the remaining 55% ownership stake and provide development, property management and leasing services. The agreement is the second joint venture between Boston Properties and CPPIB following their $627-million purchase of the Santa Monica Business Park campus in Santa Monica, CA in July 2018.
Located on a 5.4-acre site, Platform 16 is adjacent to Google’s planned 8-million-square-foot transit village and Diridon Station, the largest multi-modal transportation hub in the Bay Area consisting of Caltrain, VTA light-rail, the ACE train, and the planned BART and high-speed rail lines. Boston Properties has secured approvals and entitlements for the development of Platform 16, completed design plans and has begun to clear the site.
In November 2018, Boston Properties entered into a 65-year ground lease for Platform 16. As part of that ground lease, Boston Properties secured the right to purchase all of the underlying land during a 12-month period commencing on Feb. 1, 2020 at a purchase price of approximately $134.8 million.
“We are pleased and honored to have Canada Pension Plan Investment Board as our partner on this exciting development, expanding the relationship between BXP and CPPIB,” says Owen D. Thomas, CEO of Boston Properties. “We look forward to bringing this project to market and broadening our footprint on the West Coast.”
“Platform 16 is ideally located in one of the largest technology hubs in the country. With easy access to public transportation, as well as local housing, culture, food and entertainment, Platform 16 will help companies attract and retain the talent they need to support their growth,” notes Aaron Fenton, VP, development for Boston Properties.
The joint venture partners expect the three buildings to feature large floorplates ranging from approximately 25,000 to 90,000 square feet, 15-foot floor-to-floor heights, 16 large outdoor terraces with multiple indoor and outdoor workspaces and on-site amenities including a large fitness and wellness facility and conference center. Platform 16 will have immediate access to the adjacent Guadalupe River Park and various retail and restaurant amenities, Boston Properties states.
“Partnering with Boston Properties on the Platform 16 development is a great example of our real estate strategy in the United States. We are very pleased to further our relationship with a best-in-class owner and operator and we look forward to expanding our office portfolio in the dynamic Bay Area,” says Hilary Spann, managing director, head of real estate investments, Americas at CPPIB.
In January 2019, Boston Properties announced it had entered into agreements with an affiliate of San Francisco-based TMG Partners to co-develop Platform 16.
Boston Properties is a REIT that develops, manages, operates, acquires and owns a diverse portfolio of primarily Class A office space. The Company’s portfolio totals 50.9 million square feet and 193 properties, including 12 properties under construction.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, Canada Pension Plan Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. As of June 30, 2019, the CPP Fund totaled $400.6 billion.