Business & Tech

Kilroy Realty Now Synopsys' New Landlord

Developer expects to spend upward of $200 million to construction buildings for company at 690 E. Middlefield Rd.

Synopsys Inc., which hopes to have two new building in Mountain View, just got a new landlord.

Kilroy Realty Corporation announced Wednesday that it purchased, for an undisclosed price, the property at 690 E. Middlefield Rd. and entered into a 15-year lease agreement with Synopsys (NASDAQ: SNPS). Kilroy Realty (NYSE: KRC) will construct a 340,000 square foot campus—their first ground-up development project in the Bay Area.

"When all is said and done it will cost $200 million," said Tyler Rose, executive vice president and chief financial officer, about the pricetag to construct the buildings.

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Last October 2011, the Mountain View City Council approved a development agreement that extended for six years a permit that gave Synopsys, Inc. the opportunity to consolidate its operations in the city. And to that, the software and intellectual property services company, had announced a long-term lease agreement with developers Dostart Development Company, LLC and Rockwood Capital, LLC.

Rose would not disclose the name of the sellers of the property at 690 E. Middlefield Rd. Also, while Rose didn't disclose how much Kilroy purchased the property for, he hinted that as a publicly traded company this information may become available in a future SEC filing.

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The development agreement between the city, Dostart and Rockwood Capital allowed for the 340,000 sq. ft., or 0.50 floor area ratio (FAR), transit-oriented project on the 15.59 acre, but also included the potential to double the project to 680,000 sq. ft., or a 1.0 FAR.

However, Rose suggested that Kilroy doesn't "to build out to that level."

The approved LEED GOLD project, located within the highway triangle of 237, 85 and 101 in Mountain View, and near the Middlefield Road light rail station would replace three attached one-story buildings formerly owned by Hewlett-Packard.

Construction would be complete by the first quarter of 2015.


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