San Francisco-based property landlord and developer TMG Partners and Boston-based investor Alcion Ventures LP, have acquired their third Bay Area property in the last seven months: 3055 Orchard Drive in North San Jose.

The duo paid $16.2 million, or $145 a square foot, all cash for the 111,300-square-foot property, which is empty.

The seller was JER Partners, a real estate investment management firm based in McLean, Va.

"The Silicon Valley has been experiencing decreasing vacancy, increased rents and strong positive absorption. Santa Clara County leads the nation in job creation year-over-year, and the space appetite of Google and Apple keeps pushing leasing requirements directly into North San Jose," said TMG partner Drew Thomas.

The buyers plan an additional $2 million to $3 million investment to renovate and reposition the property in the next six months. Work is to start immediately, Thomas said.

TMG and Alcion acquired The Hamm's Building at 1550 Bryant St. in San Francisco this spring for an undisclosed price. They planned a $15 million upgrade of the former brewery, which has a singular 12-story tower and sits in the wildly popular South of Market district.

Earlier, they paid approximately $60 a square foot for the Legacy Bayside Business Park in Fremont. The three-building 234,000-square-foot research-and-development complex was empty at the time of sale and had been since 2009. Foster City-based Legacy Partners previously owned the site.

The source of capital that Alcion is using for the purchases is its commingled Alcion Real Estate Fund II. Alcion closed the capital raise on the fund in early 2010 with $497 million in equity.

Colliers International, led by Senior Vice President Andy Zighelboim and senior associates Nate Jones and Thomas Kim, represented JER in the sale.

Demand from users of research and development properties seeking 80,000 square feet or more in Santa Clara County has surged but little choice remains, Zighelboim said. "Last year in the region there were 52 lease transactions in the market of 80,000 square feet or more. The average per year for the past several years has been 27. There are now only 11 spaces currently available in the market for that size," Zighelboim said.

"The region has seen incredibly strong demand for well-located 75,000 to 100,000 square-foot blocks of space with a large number of requirements remaining outstanding," Thomas said.

Vacancy in Silicon Valley research and development space has fallen 3 percentage points in the past year and 6.6 percentage points since the second quarter of 2010, according to newly released research from brokerage CBRE Group Inc. It now stands at 13.8 percent. North San Jose, with 25.2 million square feet of R&D space, has the valley's largest concentration of R&D property, followed by Sunnyvale and Santa Clara.

North San Jose lost occupancy in the second quarter, according to CBRE, with semiconductor maker Atmel Corp. vacating not quite 300,000 square feet at 2375 Orchard Parkway.