Morgan Stanley Real Estate Investing paid $84.1M, all cash, for 601 McCarthy Blvd in Milpitas: 189,000 sf of two-story R&D on 9.7 acres, 100% leased to KLA. That is about $445 per sf (derived). KLA extended its lease through 2037, about 11 years of remaining term (derived), and funded capital work that includes 6,000 amps of power and expanded data-center infrastructure.
Milpitas industrial vacancy was 1.9% in Q2 2026. JLL represented the seller. The cap rate, seller and KLA rent were not disclosed, so this is a price-per-foot comp, not a yield comp.
The tenant spent its own capital on electrical capacity, which raises its cost to relocate and the landlord's re-leasing value. The downside case is re-leasing to another semiconductor or advanced-tech user, which makes the power infrastructure the collateral.
Implications: Single-tenant R&D with installed power and long term trades on a different basis than generic industrial. Cash buyers can compete when leverage is expensive. Owners of similar assets should document tenant-funded improvements that add alternative-use value.
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Key Takeaways
- In tech real estate, the amperage is part of the asset value.
- An all-cash buyer avoids a 5%-plus debt market.
Bisnow, Oct. 1, 2026 · CRE360 analysis: price per sf and remaining term derived. Cap rate, seller and rent not disclosed. Single source.
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