Boston Properties BXP recently broke ground on a billion-dollar office project in downtown San Jose, per a Business Journal report. Particularly, this 1.1-million-square-foot office campus, Platform 16, near the Diridon Station and neighboring Google's planned mixed-use village on downtown's west side will offer a campus setting in an urban environment.
The campus, designed by architecture firm Kohn Pedersen Fox Associates, will include three six-story office buildings, along the Guadalupe River Park. The average floorplates will range from 28,000-88,000 square feet, with 16 outdoor terraces in total, and indoor and outdoor workspaces.
The first phase, likely to be ready for occupancy in early 2023, comprises a six-story building at 325 Autumn Parkway. This will provide 390,000 rentable square feet as well as an underground parking garage.
Notably, Platform 16 marks the first project to break ground in the Diridon Station Area Plan since its adoption in 2014. This plan calls for integration of open space, transportation and land uses for expanding downtown San Jose. With strong neighborhoods and strategic developments, the region is likely to emerge as a thriving one in the upcoming years.
With access to the Bay Area’s regional transit, housing options, urban lifestyle and workspace design, Platform 16 is likely to drive solid attention from tenants.
In late February, Boston Properties acquired the 5.5-acre Platform 16 project site for $134.75 million from San Francisco-based TMG Partners and San Jose-based Valley Oak Partners, which are now helping the project’s development. Moreover, the Canada Pension Plan Investment Board is providing capital for development and has a 45% ownership interest in the office development.
Notably, Boston Properties’ high-quality properties in select high-rent, high barrier-to-entry geographic markets enable it to enjoy strong leasing volumes amid healthy job-market environment, which supports its profitability. Also, its focus on opportunistic acquisitions and development projects are expected to contribute to cash flow over the long term.
Shares of this Zacks Rank #2 (Buy) company have gained 6.1% in the past six months, as against the industry’s loss of 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Prologis, Inc. PLD currently carries a Zacks Rank of 2 (Buy). The company’s FFO per share estimate for 2020 has been revised 1.4% upward to $3.72 in a month’s time. The stock has rallied 34.5% in the past year.
Highwoods Properties’ HIW Zacks Consensus Estimate for the current-year FFO per share has moved marginally upward to $3.64 over the past week. Shares of this Zacks #2 Ranked company have gained 9.3% over the past year.
Piedmont Office Realty Trust, Inc. PDM currently carries a Zacks Rank of 2 (Buy). The company’s FFO per share estimate for 2020 has been revised 3.2% upward to $1.96 in a month’s time. The stock has rallied 14% in the past year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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