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Sand Hill Commons, the Menlo Park office complex on Sand Hill Road that shattered sales records nationally in 2015 when it sold for $1,800 per square foot, changed hands in an all-cash deal on Oct. 28.
Norges Bank Investment Management, the world’s largest sovereign wealth fund, paid $217 million, or $1,632 per square foot, for a 97.7% stake in the two-building, 133,449-square-foot office campus at 2882-2884 Sand Hill Road. San Francisco investment firm DivcoWest, which owns about 44% of the commercial space along Sand Hill Road, purchased the remaining 2.3% interest in the office campus and will perform the asset management for the property, according to a press release.
The wealth fund said the property, which it purchased from Clarion Partners and Invesco Real Estate, is valued at $222 million.
The 12-acre campus includes two office buildings, a fitness center, a conference room and a restaurant and has plans filed with the city for exterior improvements, including the addition of outdoor shade structures.
The Sand Hill deal marks Norges Bank Investment Mangement’s latest joint venture in the United States.
The wealth fund is the investment arm of Norway’s central bank and manages the country’s $1.4 trillion Government Pension Fund Global. It has real estate investments around the world and owns about 1.5% of all globally listed shares, with stakes in more than 9,000 companies, according to its website. Its top holdings include Silicon Valley companies Apple, NVIDIA and Alphabet.
Sand Hill Commons made headlines in 2015 when Invesco Real Estate paid $240 million — or the equivalent of about $1,800 per square foot — for a 49% stake in the complex, setting a national per-square-foot sales record for suburban office deals larger than 50,000 square feet, the Silicon Valley Business Journal reported.
At the time, that amount was considered staggering even for Sand Hill Road, known as the epicenter of venture capitalists and often listed as one of the most expensive streets in the United States. In April, the 5.6-mile stretch of roadway topped the list of most expensive streets in the nation with average full-service gross asking rents reaching $167.74 per square foot, according to a 2024 study by commercial real estate and investment management company JLL that analyzed more than 50 U.S. markets. Palo Alto’s University Avenue ranked fourth on the list with rents reaching $109.04 per square foot.
Hope this project is a net positive for housing unlike the SRI project at Middlefield and Ravenswood. If this project site doesn’t have a net positive on housing, we will need to add more housing to the downtown and Middlefield? It would be great if our law makers were more than just talk on having the housing element to be balanced housing density throughout a city instead of the current result of the city adding housing to the most dense neighborhoods without requiring and funding to support safe active transportation.