BlueRock Group Affiliate Acquires Sunnyvale Office Hub at 1133 Innovation Way for $330.7M

An affiliate of BlueRock Group, a New York-based alternative asset firm, has acquired a Class-A office complex in Sunnyvale, California for $330.7 million, pairing the purchase with a long-term leaseback agreement that runs through 2047.

The transaction involves the eight-story office building at 1133 Innovation Way near Moffett Field. The property totals 319,000 square feet and is occupied by Juniper Networks, the enterprise networking, switching, and router manufacturer that Hewlett Packard Enterprise acquired in July 2025 for $14 billion.

Deal Structure and Financing

The $330.7 million purchase price implies approximately $1,036 per square foot. BlueRock Group funded the acquisition with a $310 million loan led by Wilmington Trust. The leaseback arrangement with HPE extends through 2047 and includes an option to extend for an additional 14 years, providing the new owner with a long-duration income stream anchored by a single creditworthy occupier.

HPE described the sale as part of its management strategy for its portfolio of real property assets. The company retains ownership of 1137 Innovation Way, an adjacent property on the same corridor.

Corporate Context: HPE's Post-Juniper Real Estate Strategy

HPE completed its acquisition of Juniper Networks on July 2, 2025, following an announcement in January 2024. The combination created overlap between HPE's existing real estate holdings and the facilities inherited through the Juniper deal — a common catalyst for corporate property dispositions. The sale-leaseback structure allows HPE to monetize the asset while maintaining occupancy at the Innovation Way campus.

The transaction fits a broader pattern in Silicon Valley in which owners of large corporate campuses monetize real estate while remaining in place as tenants, preserving operational continuity without retaining ownership of the underlying asset.

Sunnyvale Office Market Conditions

The deal comes as the Silicon Valley office market shows early signs of stabilization. The overall Silicon Valley market posted a vacancy rate of 16.0% in the second quarter of 2026, down 170 basis points year over year, with availability at 16.5%. Sunnyvale has outperformed the broader valley, recording direct vacancy of 13.7%, total vacancy of 14.0%, and availability of 13.0% in the same period, with average asking rents of $5.75 per square foot per month — among the highest in the region.

The Sunnyvale submarket has remained a focal point for high-value office transactions. Earlier in 2026, Apple paid $162.2 million for 684 W. Maude Ave. in Sunnyvale, a 194,622-square-foot property that traded at approximately $833 per square foot — the second-largest Silicon Valley office sale recorded in the second quarter.

Market Implications

The 1133 Innovation Way acquisition underscores a bifurcation in the Silicon Valley office market: well-located, credit-anchored assets continue to attract institutional capital, while more commodity office properties remain under pressure. The pricing on the BlueRock Group deal — at roughly $1,036 per square foot — reflects investor willingness to underwrite long-duration income backed by enterprise tenancy and mission-critical location, rather than speculative near-term demand recovery.

The transaction also signals that sale-leaseback structures remain a viable tool for large technology companies managing inherited or consolidated real estate portfolios following major acquisitions.

Sources

Kidder Mathews — Bluerock Affiliate Acquires Sunnyvale Office Hub For $330.7M