SKB Case Studies

Enterprise Technology Center, Scotts Valley, CA

Enterprise Technology Center

Transaction Summary

Failed Auction
Investment Date:
March 2000
Property Description:
Class A Office
Scotts Valley, CA
Equity Invested:
$16.4 million

Investment Highlights

  • Acquired asset after several failed auctions and asset was officially taken off the open market; SKB purchased the asset at a 60% discount to original construction cost
  • Award winning corporate campus designed by architect Kevin Roche that included an upscale cafeteria, athletic club including a swimming pool and tennis courts, outdoor amphitheatre, Koi pond and 300 seat auditorium
  • Owner-occupant/seller had recently emerged from reorganization occupying only 45% of their corporate campus; surrounding submarket was 4% vacant
  • Original strategy was to reposition the asset as a multi-tenant “plug and play” property and lease up vacant space, but during the collapse, occupancies in Scotts Valley and surrounding areas fell to 60%
  • Due to highly desirable nature of the asset, SKB was able to maintain occupancy at nearly 90% as well as demand LOCs and credit enhancements for all leases
  • In 2004, SKB sold the asset
  • SKB demonstrated its ability to bring a troubled asset to a successful outcome in challenging market and down economy