Silicon Valley Office Asset Trades for $35M

South Bay Tech Center

South Bay Tech Center, a six-building, 161,700-square-foot office/R&D property in Milpitas, Calif., has changed hands for $35.3 million, Santa Clara County records show. The buyer was Intelli LLC, an entity affiliated with Vien Thao Media. The San Jose-based firm financed the acquisition with a $21.2 million loan from Cathay Bank. The seller was an entity affiliated with Benlin Properties.

The Class B property traded for approximately $218 per square foot. The price is more than 50 percent smaller than the average sale price recorded year-to-date through February for Bay Area office assets, according to a recent CommercialEdge report.

Situated on more than 11 acres at 1603 S. Main St., the office campus came online in 1987. The asset comprises four one-story and two two-story buildings that also feature loading doors for industrial use. A diverse mix of tenants leased space at the property, with the tenant roster including Bay Area Realty Investment, Wine Globe, Forever Health and Concentra Urgent Care.

The property is 6 miles north of downtown San Jose and Google’s massive mixed-use development, just north of Montague Expressway. The location is also 2 miles from another office/R&D campus that traded in August for $45.5 million.

A flurry of Silicon Valley investments

Despite difficulties brought about by the pandemic, the Bay Area office market has witnessed a high number of deals during the last six months. CommercialEdge data shows 38 properties totaling more than 4.5 million square feet changed hands for an aggregate value of $1.8 billion in the fourth quarter of 2020 alone. Of the total, Silicon Valley assets accounted for a little more than $4 million, marking a 44.5 percent drop in the year-over-year investment activity, according to a recent Kidder Mathews report.

One of the largest deals closed in October, when Swift Real Estate Partners acquired a 373,000-square-foot office campus leased to Apple in Cupertino, Calif., for $346 million. The seller was DWS Group, the asset management affiliate of Deutsche Bank, which sold the Class B asset after nearly seven years of ownership.

Other noteworthy transactions include DivcoWest’s $160 million disposition of a 317,612-square-foot office/R&D campus in San Jose, Calif., and Stanford University’s $123 million sale of a newly constructed, 85,420-square-foot building within its Stanford Research Park in Palo Alto, Calif.