Tishman sells Mountain View office at $876 a foot, leased throughout

According to IREI, Tishman Speyer has sold 400 Castro Street, a 138,000-square-foot class A office building in downtown Mountain View, to Spear Street Capital for $121.5 million, or $876 a square foot, with Eastdil Secured representing the seller. The building has been fully leased for essentially its whole life — Tishman developed it in 2002, leased it to Fenwick & West at completion, and the tenant is still there — and that tenancy is where the price comes from. Spear Street is buying a rent roll, and the pitch attached to that rent roll is roof decks, efficient floorplates, underground parking, Caltrain and highway access, and Cascal, Peet's Coffee and Sweetgreen on the ground floor; amenities like those help keep a tenant. The report does not say when the Fenwick & West lease expires, which is the one number that would tell a buyer how many years of income $121.5 million actually purchased.

Tishman has been on both sides of the leased-asset trade in the past three weeks: it closed a $340 million Anaheim purchase, paying $904,000 a key for a 95%-leased 2020-vintage property and budgeting amenity work on top, the renovation-upside thesis priced at the top of the market; it refinanced The Franklin with a $340 million single-asset CMBS loan written against a leased trophy; and a Tishman-Bellco venture sold an entitled South Boston parcel to Procter & Gamble's Gillette business for $99.3 million, monetizing the entitlements rather than building. Castro Street runs the same instinct in the opposite direction — a stabilized asset with no capital story, sold out of a hold that began at development.

Which is why $876 a foot should not be read as a Mountain View recovery: nothing in this trade tested the commodity end of the submarket. A fully leased building with a tenant that stays clears at a price a vacant one cannot approach, and that gap is the split that now defines office. Whatever Spear Street's model holds, the trade reads as a wager on the corner — downtown retail, transit, a tenant with every reason to renew — rather than on the cycle. If a downtown Mountain View building with space to fill trades this year, that price, not this one, tells you what the submarket is worth.