SF Developer Pays $72M for Struggling Silicon Valley Shopping Center, Plans Labs

Presidio Bay Ventures’s K. Cyrus Sanandaji with Charleston Plaza (LinkedIn, Hawkeye Photography)

Presidio Bay Ventures, a San Francisco firm developing lab projects in its home city and San Carlos, aims to further capitalize on the Bay Area’s booming life science sector through its purchase of a struggling shopping center in Silicon Valley.

The developer and investor paid $72 million to buy Charleston Plaza, a five-building, 132,600-square-foot center straddling the Palo Alto-Mountain View border that lost three anchor tenants last year. The 16-year-old center next to Highway 101 covers 11 acres at 2400-2470 Charleston Road in Mountain View, comprising four big-box retail buildings and a standalone site for shops or restaurants.

About three-quarters of the property is available for lease, according to a news release from JLL, which represented seller Nuveen Real Estate and found the buyer. Nuveen didn’t respond to requests for comment.

Presidio Bay plans to redevelop three of the Plaza’s big-box buildings into lab and research facilities, founder K. Cyrus Sanandaji said in an email. Bed Bath & Beyond, Best Buy and REI all vacated the structures over the past year and a half, and they remain empty. The firm will market the project to industrial, research and development and lab companies looking for about 100,000 square feet, he said. Its proposal will conform with the center’s land-use designation under Mountain View’s general plan, which accommodates “both regional commercial and some continued light manufacturing and research and development uses,” he said.

The redevelopment won’t displace any of the property’s tenants, which include Chipotle, PetSmart, Starbucks and Supercuts, Sanandaji said. His firm aims to link the center’s retail mix to the surrounding industrial and research uses in the greater Stanford Research Park submarket. Stanford designated in 2019 an 85-acre portion of the 700-acre park four miles southwest of Charleston Plaza as a district for life science companies.

“These combined uses in one larger campus setting will enhance the experience for our future end-users, the retail tenants and the surrounding community by creating a highly amenitized destination that benefits from both onsite and offsite consumer demand,” Sanandaji said in a statement.

Presidio Bay’s plans could face opposition from local residents, many of whom were concerned that the center will be redeveloped into offices or housing after seeing three anchor tenants vacate it. Mountain View Mayor Lucas Ramirez told the Mercury News in January that redevelopment wasn’t likely. He and the City Council don’t have any plans to explore rezoning there to allow housing, Ramirez said at the time.

While Charleston Plaza is Presidio Bay’s first shopping center purchase, the firm isn’t a stranger to lab real estate. It plans to complete a 147,000-square-foot Class A research and life science building in San Carlos by the end of next year and is seeking to almost triple the size of a completed lab facility in San Francisco.