CM Capital Corp, the US-based family office of Hong Kong’s billionaire Cha clan has purchased a $117.5 million office building in downtown Palo Alto, California from a local joint venture, paying one of the highest prices per square foot for a Silicon Valley office property so far in 2018, according to an account in US real estate news site The Registry.
The Cha family, famed for their control of Hong Kong Resorts International – the developer of the Discovery Bay residential community on Lantau Island – purchased the three-story office building at 530 Lytton Ave in the hometown of Stanford University for the equivalent of $2,136 per square foot ($22,992 per square metre).
The purchase of the full-city block property gives the Hong Kong clan, who have been investing in US real estate through CM Capital since 1969, control over a pair of adjacent properties in the corporate home of HP, Tesla and other tech giants.
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CM Capital, which was founded by the Cha family’s late patriarch Cha Chi Ming, purchased the 17,178 square foot (1,595 square metre) property from a joint venture between local investment firms Blox Ventures and Law & Associates for nearly double the $52.9 million that the group had paid to purchase the office building in 2015.
530 Lytton Ave is one of the largest office buildings in downtown Palo Alto, and is anchored by Bank of America. The low-rise asset also provides corporate homes for venture firm Translink Capital, as well as the venture arms of the CSC Group and German insurer Allianz.
Blox was represented in the transaction by Newmark Knight Frank’s capital markets team. The building one block away from University Avenue in Palo Alto is located directly behind CM Capital’s 525 University Ave office tower, which the Cha family investment firm also owns and where it makes its headquarters.
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The Blox- Law & Associates JV had made some significant additions to the 1972-vintage property during its ownership of the asset, reported San Francisco-based The Registry. The first and third floors of the building went through a full renovation including new elevators, staircases and wood flooring in the hallways. The interior lobbies and outside amenity areas were enhanced with modernization while being thoughtful in utilizing materials that related to the original design and vintage of the building.
C.M. Capital, established in 1969 in Palo Alto to provide investment insight and opportunities to the Cha Family and the Cha Group of affiliated companies, is no stranger to owning real estate in the prized Silicon Valley. It also owns the 525 University Ave. office tower, adjacent to the newly acquired Lytton Avenue building and where the firm maintains its headquarters.
Palo Alto’s office market is deemed by experts to be relatively robust and a sector that attracts tenants. During the second quarter that ended in June, according to a report by realty firm Colliers International, the vacancy rate in Palo Alto for Class A offices was 6.7 percent, compared with 13.3 percent for all of Silicon Valley during the April-through-June period.
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In Hong Kong, the Cha family is active not only through HKRI, which holds a 50 percent stake in the HKRI Taikoo Hui project on Shanghai’s West Nanjing Road, but also through Hanison Construction, which is chaired by Cha Chi Ming’s oldest son Payson Cha and through privately-held firms the Mingly Corporation and CDW International. Benjamin Cha, son of HKRI vice chairman Victor Cha and HSBC non-executive chair Laura Cha Shi May-Lung and grandson of Cha Chi-ming is currently Asia-Pacific CEO for British developer Grosvenor.
The Hong Kong-based Cha Group was founded in 1949 as China Dyeing Works, a textile manufacturer, by the innovative entrepreneur, Cha Chi Ming. Over the years, its business operations have spanned the globe and included textile and other manufacturing, real estate, technology and financial services.
HKRI, is most famous for creating Hong Kong’s biggest beachside California-style residential and resort community – Discovery Bay – 40 years ago.
The group also celebrated the completion of its nearly RMB 18 billion joint venture project HKRI Taikoo Hui with Swire last year. The 3.46 million square foot (322,000 square meter) mixed-use mega development on Shanghai’s West Nanjing Road not only houses office, residential, hotels and a shopping mall, but also China’s first Starbucks Roastery and Tasting Room.
Editor’s note: This story has been updated to clarify the ownership of the vendor