Sand Hill Property Company Sells Los Gatos Whole Foods Site for $46M
Sand Hill Property Company has sold a newly built Whole Foods Market in Los Gatos, California for $46 million, closing the transaction just a few months after the supermarket opened its doors in April 2026.
The property, located at 15650 Los Gatos Boulevard, is a roughly 40,000-square-foot grocery store — nearly twice the size of the existing Los Gatos Whole Foods location a short distance south at 15980 Los Gatos Boulevard. At approximately $46 million, the deal implies a price of around $1,100 to $1,150 per square foot. The buyer is an entity tied to Mill Valley-based Sunhill Corporation.
A Multi-Year Assemblage Play
The transaction caps a multi-year land assemblage and development effort by Sand Hill Property Company along Los Gatos Boulevard. Sand Hill acquired the core 2.9-acre grocery site — comprising parcels at 15600 and 15650 Los Gatos Boulevard — for $15.1 million in 2021. The firm later acquired two former auto-dealership parcels totaling 4.5 acres at 15480 and 15500 Los Gatos Boulevard for $26.5 million, bringing its total assemblage to roughly 7.4 acres at a combined land cost of approximately $41.6 million.
The broader development on the corridor also includes a Tesla showroom and service center situated between 15500 and 15650 Los Gatos Boulevard. Sand Hill retains control of additional acreage on the corridor where development plans have not yet been fully executed.
New Construction, Fully Occupied at Sale
The Whole Foods at 15650 Los Gatos Boulevard opened on April 15, 2026, making it a newly delivered, single-tenant asset at the time of sale. As a purpose-built, single-tenant grocery store, the property was fully occupied by Whole Foods Market upon closing.
West Coast grocery-anchored single-tenant assets in affluent suburban markets have in recent years traded in the low- to mid-5% cap rate range, with top-tier locations occasionally pricing tighter. Los Gatos is a high-income Silicon Valley community with constrained retail supply, characteristics that have historically supported compressed cap rates for credit-tenant grocery assets. No cap rate for this transaction was reported in available sources.
Strategic Rationale: Capital Recycling and Value Capture
Sand Hill Property Company's decision to sell shortly after the store's opening is consistent with a develop-and-sell strategy that monetizes a stabilized, credit-tenant asset while capturing pricing tied to new construction and a long-term lease. The exit also allows the firm to recycle capital into other projects across its Silicon Valley pipeline while retaining optionality on the remaining acreage it controls along Los Gatos Boulevard.
For the buyer, the acquisition secures a newly delivered, long-term leased Whole Foods Market — a banner owned by Amazon — in an affluent, supply-constrained submarket.
Market Context
The $46 million sale price and implied per-square-foot valuation position the deal as a notable data point for grocery-anchored net-lease pricing in Silicon Valley. Single-tenant grocery assets anchored by credit tenants in high-barrier-to-entry markets have continued to attract investor demand, and the Los Gatos transaction reflects the premium that new construction and top-tier suburban demographics can command in the current environment.
The transaction was reported August 5, 2026.