VC fund briefs, July 6, 2009

NEA expands to larger Sand Hill Road digs

Recently, New Enterprise Associates leased a 25,000-square-foot office on Sand Hill Road in Menlo Park, Calif., for its 45 West Coast partners, associates and administrative staffers.

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 Oak Hill Capital Partners, has remained vacant while Oak continues its ongoing search for a firm to sublease the space. An undisclosed tenant will be taking up the rest of the building shortly, Elliot says.

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 has held a $75 million first close on its second venture fund, including $25 million from the Small Business Investment Co. program. The Northbrook, Ill.-based firm is seeking to raise $150 million.

MK Capital raised $152 million for its debut fund, which closed in 2003.

TGap closes second fund

Kalamazoo, Mich.-based TGap Ventures has closed its second with $50 million in commitments, according to VentureWire. PE Week last week reported that the firm had raised $15.9 million toward TGap Venture Capital Fund II, according to a regulatory filing. The firm, launched in 2002, focuses on early stage opportunities in the Midwestern United States.

Acton raises $177M

Acton Capital Partners, a spinout of the corporate VC arm of Germany’s Hubert Burda Media, has secured about $177 million in capital commitments for its debut fund, according to VentureWire. The target of the fund is about $210 million.