TMG Partners and accounts managed by KKR have purchased Skyport Plaza, a 435,000-square-foot office and retail complex in San Jose, from Hudson Pacific Properties. The multi-building property includes addresses at 1650 Technology Dr., 1700 Technology Dr., 50 Skyport Dr. and 90 Skyport Dr. Hudson Pacific reported a sale price of $75.5 million for the transaction.
As part of the acquisition, TMG executed a long-term lease with the County of Santa Clara covering 393,000 square feet at Skyport Plaza. The 30-year lease is expected to begin in the first quarter of 2029. Before the lease commences, the new ownership plans extensive renovations to the property’s two office buildings.
The two office buildings were formerly occupied by Qualcomm and are currently 100% vacant. The renovation program is intended to prepare the buildings for the County of Santa Clara’s long-term occupancy. While the office space awaits upgrades and build-out, the retail component at Skyport Plaza is reported to be fully occupied.
According to TMG co-CEO Ben Kochalski, the lease will support the County of Santa Clara’s consolidation at Skyport Plaza and is expected to provide a more efficient and modern setting for county employees. He noted that TMG looks forward to collaborating with the county on property improvements, including modernizing the infrastructure for staff and providing a location with convenient access to services and restaurants.
The combination of the acquisition and the long-term lease structure ties a public-sector tenant to the complex for several decades, subject to commencement in 2029 after the renovation phase. The transaction also transfers ownership of a large, fully leased retail component and a vacant office component slated for upgrades and re-tenanting to a new institutional ownership group.
Skyport Plaza thus transitions from Hudson Pacific Properties to the venture between TMG Partners and accounts managed by KKR, with the County of Santa Clara lined up as a future major tenant for the office portion of the complex once improvements are completed.
