HSBC Bank has provided $120 million in financing on the Apple-anchored two-building office component of Main Street Cupertino, a mixed-use development project in Cupertino, California.
The floating rate loan backs 260,000 sq ft of office space occupied by the tech giant, which struck the deal to lease the space when it was still under construction in March of 2015. The offices serve as a supplement to Apple Campus 2, the massive 2.8 million sq ft spaceship-like property that sits just across Interstate 280 from Main Street Cupertino.
CBRE, which arranged the deal, noted in a statement that high-income tech jobs in the area have had a positive effect on the economy and the commercial real estate market, spurring the need for the development project. The firm called attention to an array of positive market factors that it believes will allow the developer/borrower Sand Hill Property Company and its capital partner to continue to attract tenants.
Designed to serve as the town center for Cupertino, the development consists of office, retail, hotel and loft apartments. The offices were completed earlier this year; and the Cupertino office market is one of the tightest within Silicon Valley, with a total overall office vacancy of just 2.2 percent as of Q1 2016, according to CBRE Research. The retail component is slated to be completed by the end of 2016.
“The Cupertino multifamily and hotel markets continue their strong pace with rising rents, room rates and minimal vacancies,” the firm added, noting that the project’s “central location and ambiance will make it highly sought after by office, retail and residential tenants, as well as hotel guests.”
Several retailers are open for business, including Lazy Dog, Lyfe Kitchen, TD Ameritrade, Eureka! Burger, and Philz Coffee. The hotel, franchised to be a Marriott Residence Inn, and the apartments, are slated to open in 2017.