SANTA CLARA — A big South Bay tech campus has been bought for more than $50 million in a deal that points to a still-wobbly Bay Area office market whose values have yet to regain their pre-coronavirus heights.
LBA Realty has paid $55.5 million for a tech campus at the corner of Central Expressway and De La Cruz Boulevard, according to documents filed on Nov. 26 with the Santa Clara County Recorder’s Office.
Despite some signs that the Silicon Valley commercial real estate market has begun an uneven convalescence in the post-COVID era, property values for office buildings in the Bay Area and South Bay remain under pressure.
The just-completed deal for the @Central campus underscores the fading values for office buildings in the region.
The seller, an affiliate of Swift Real Estate Partners, paid $97.6 million in 2018 for the tech campus, real estate records show.
This means the latest price is 43.1% below the prior purchase amount in 2018.
The property lost a hefty amount of value despite a comprehensive effort by Swift Real Estate to spiff up the tech campus. A marketing brochure circulated by Newmark, a commercial real estate firm, stated the campus totals 298,300 square feet. The campus’ addresses include 2770, 2800, 2830, 2860 and 2990 De La Cruz Blvd., the Newmark brochure shows.
“Immediately after acquisition, Swift started a large-scale renovation,” Swift stated in a post on its website. Swift added that the renovation “included new front facades and multiple outdoor amenity areas, which cater to large single-tenant tech users.”
Despite these efforts, big tech companies didn’t flock to the office and research campus. The marketing brochure stated that as much as 92,700 square feet was available for leasing.
Still, the falling property values also mean landlords are poised to dangle lower rents in front of tenants that are seeking office and research spaces at attractive rates.
LBA Realty, the new owner of @Central, is a veteran real estate firm whose expertise includes virtually every asset class in the commercial real estate market. The company is also very active in the Bay Area commercial property sector.