It was a notable upgrade for NEA, which had been leasing about 13,000 square feet in two buildings across the street, where most of the venture firms in Menlo Park—including Kleiner Perkins Caufield & Byers, Benchmark Capital and Sequoia Capital—are housed in a sprawling mass of low-slung and nearly identical buildings.
NEA, which raised $2.15 billion for its most recent fund that closed earlier this year, declined to disclose the terms of its new lease.
Yet it appears that NEA is the only private equity firm that’s right now willing and able to upgrade to larger digs. Its new offices are part of a recently completed $200 million, 21-acre, Stanford University-owned development featuring four 25,000-square-foot buildings; a 123-room luxury hotel with a deluxe spa; and Madera, an expansive, upscale restaurant and bar.
Steve Elliot, managing director of development projects for Stanford, says that the rest of the buildings aren’t filling up nearly so easily. One of the four structures has yet to attract a tenant. Another, which was rented in 2007 by
Reis Inc., a research firm that surveys commercial real estate performance, pegged the monthly price on Sand Hill Road, at roughly $12.50 per square foot as of the end of last year. Elliot wouldn’t comment on the exact price of the Class A office space that he’s managing. “Class A office buildings on Sand Hill Road remain very desirable and strong in general,” he says. However, he admits that vacancies in the area “are up slightly,” and he says Stanford isn’t willing to accept a shorter lease for less money.
Including Stanford’s new office complex, the 1 mile-long stretch of Sand Hill Road where investors like to congregate features a little more than 1.1 million rentable square feet of vacant space. In comparison, downtown San Francisco has about 50 million square feet of rentable space. —Constance Loizos
MK raises $75M
MK Capital raised $152 million for its debut fund, which closed in 2003.
TGap closes second fund
Acton raises $177M