TMG, KKR accounts buy San Jose's Skyport Plaza for $75.5M; TMG signs county lease

TMG Partners and accounts managed by KKR acquired Skyport Plaza, a 435,000-square-foot office and retail complex in San Jose, from Hudson Pacific Properties, Connect CRE reported. Hudson Pacific announced a $75.5 million sale price. Across the four addresses, 1650 and 1700 Technology Drive and 50 and 90 Skyport Drive, that comes to roughly $174 a square foot.

In conjunction with the acquisition, TMG signed a 30-year, 393,000-square-foot lease with the County of Santa Clara. The lease is expected to commence in the first quarter of 2029, following extensive renovations to the two office buildings, which Qualcomm formerly occupied and which are now 100% vacant. The retail is fully occupied. Connect CRE's report does not disclose a rent figure or a renovation budget.

Until 2029, the only in-place income at Skyport Plaza is the retail, since the office space the county is taking sits empty through the renovation. That places the renovation cost and the holding period on the buyer's side of the ledger, against a 30-year commitment signed before the work begins. The undisclosed renovation budget is what determines whether a $174-a-square-foot basis carries the spend.

"We're pleased to support the County of Santa Clara in their consolidation at Skyport Plaza which will provide a more efficient and modern experience for their employees," TMG co-CEO Ben Kochalski said in the Connect CRE report. He said TMG looks forward to working with the county on property improvements to modernize infrastructure and to provide a location with convenient access to services and restaurants.