Eric and Wendy Schmidt Family Office Buys Lane Partners Development Site in Menlo Park
SILICON VALLEY BUSINESS JOURNAL
MAY 16, 2016
The seller in the latest deal was a joint venture of Lane Partners and Pimco.
The family office of Eric and Wendy Schmidt will build a new Menlo Park office building after acquiring a fully approved development site steps from the downtown Caltrain station.
The Schmidt’s family office on Friday snapped up Alma Station at 1020 Alma Street, where it plans to build a roughly 25,000-squarefoot, ultra-green office building beginning this summer. Lane Partners, the Menlo Park-based development firm, was the seller.
When complete, the project will house the Schmidts’ sprawling network of charitable endeavors — such as the Schmidt Family Foundation and Schmidt Ocean Institute — its Fund for Strategic Innovation and the family office itself, Hillspire. Those entities are currently spread out in Palo Alto and elsewhere in Menlo Park.
“Eric and I are delighted to bring our philanthropic and family office employees together in one building in Menlo Park,” Wendy Schmidt, president of the Schmidt Family Foundation and co-founder of the Schmidt Ocean Institute, said in a statement provided to the Business Journal. “In addition to a building designed to use less water and energy, and a location that allows for easier commuting from both the north and south, our employees and the public will have access to a welcoming outdoor space.”
Eric Schmidt, the former CEO of Google and current executive chairman of Alphabet Inc., is one of the world’s wealthiest people, with a net worth estimated at more than $10 billion, according to Forbes. His wife of nearly 36 years, Wendy, worked at Sun Microsystems, founded her own interior decorating company for 16 years and then focused on philanthropy full time. In 2014, the San Francisco Chronicle called her“one of the great environmental philanthropists of our time, giving away nearly $600 million since 2006.”
That same Chronicle story reported that the Schmidt Family Foundation has given away $451 million, and the ocean institute $100 million more.
In Menlo Park, the Schmidts actually purchased the rights to lease the ground where the project will be built. The parties did not disclose the price, but an assignment of lease filed with the San Mateo County clerk’s office on Friday values the transaction at $11.54 million.
Sares Regis Group of Northern California will be the development manager for the project. Vance Brown has been tapped as the general contractor.
The transaction is another big win for Lane Partners, which made national headlines last year when it sold Uptown Station — downtown Oakland’s former Sears store — to Uber Technologies Inc. for $123.5 million. Lane is also marketing a 100,000-square-foot office project that was recently approved at 2075 Broadway in Redwood City.
For Menlo Park, the sale is a big vote of confidence for the compact downtown pocket, which is charming but hasn’t morphed into as vibrant a district as the downtowns of Mountain View, Los Altos or Palo Alto.
There’s been lots of chatter that Sand Hill Road, Menlo Park’s traditional deal-making “miracle mile,” is losing favor to hipper climes like downtown Palo Alto. In that context, the investment by the Schmidts supports the thesis that the city needs more transit-friendly, walkable development in its own downtown.
Plans are now percolating for several more urban-scale office and apartment projects on El Camino Real, including from Stanford University and Greenheart Land Co. The projects have led to debate in the city about growth, but citizens in 2014 rejected a measure that would have clamped down on projects in the corridor.
The 1020 Alma site has been in the works for two years and was approved last year. Slated for a roughly two-thirds-acre site, it’s the brainchild of Lane Partners’ principal Marcus Gilmour. The resulting design by BAR Architects rises three stories and features traditional and modern architectural elements, several outdoor decks, two levels of underground parking and a striking glass level on the top floor. There’s also a public plaza with “coffee pavilion,” according to a project description. Interior design is by BraytonHughes Design Studios. The project will replace about 9,000 square of older commercial buildings.
“This central Menlo Park site had great potential for redevelopment and we’ve been working with the city to entitle it for the highest and best use,” Gilmour said in a statement provided to the Business Journal. “The City of Menlo Park negotiated a strong public benefit package that will enhance the neighborhood and enliven the area adjacent to the Caltrain Station.”
The Schmidts acquire a project that’s slated to be highly efficient. The goal is to make it “net zero,” or to generate as much energy as it uses over the course of a year, and LEED Platinum, which is an environmental efficiency rating system.
The Schmidts’ family office, Hillspire, is run by Chuck Chai and manages more than $5 billion of the Schmidts’ wealth, according to a 2015 Wall Street Journal story. It made headlines last year when it bought a 20 percent stake in hedge fund D.E. Shaw for about $500 million.