PALO ALTO — Local real estate investors have displayed an appetite for downtown Palo Alto properties with the purchase of an office building across the street from other office sites they already own.
Semin Valani, a South Bay business executive, led the buying group that acquired the one-story building at 578 University Ave. for $13.3 million, according to documents filed on Nov. 18.
Valani also is involved with a group that owns a building across the street at 567 University Ave. and another at 555 University Ave.
The sellers in the deal were multiple individuals and family trusts, county records show. The buying group obtained $9.3 million in financing from Loan Oak Fund at the time of the purchase.
The 578 University building totals 9,300 square feet and is an office for a residential real estate firm, according to marketing materials circulated by Premier Properties, a commercial real estate firm.
The building was bought for roughly $1,427 per square foot, county documents show, well below the high-water marks that some recent purchases of office buildings established in downtown Palo Alto.
In August, an office building at 250 Hamilton Ave. at the corner of University Avenue was bought for $82 million, or $1,979 a square foot, a value level that was prevalent in Palo Alto and other high-demand office markets prior to 2020 and the effects of a global pandemic.
Some examples of notable office building purchases in downtown Palo Alto prior to the COVID-19 outbreak include 192 Lytton Ave. for $23.1 million, or $2,551 a square foot; 530 Lytton Ave. for $117.5 million, or $2,156 a square foot; 150 Forest Ave. for $26 million, or $2,153 a square foot; and 385 Sherman Ave. for $138 million, or $2,030 a square foot.
In sharp contrast, in February 2024, a real estate group that included George Mersho, the Shoe Palace chief executive officer, paid $34.2 million, or $105 a square foot, to buy a downtown San Jose double-tower office complex that totals 325,200 square feet.
That purchase came just a few months after a Mersho-led group paid $23.8 million in December 2023 for a downtown San Jose office tower totaling 157,500 square feet, which works out to $151 a square foot.