SAN JOSE — A big office and research park in north San Jose has been bought by a West Coast investment group, part of a billion-dollar shopping spree for Silicon Valley properties in recent weeks.
RioTech Park in north San Jose has been bought in an all-cash deal by a Seattle-based group in a deal that is just the latest of several major purchases of large office complexes in Silicon Valley in less than a month.
Starting at the end of March, investors have paid well over $1 billion for large office properties in Santa Clara County, a sign that buyers have long-term confidence in the region’s office market.
“Values for commercial real estate in Silicon Valley have held steady,” said Mark Ritchie, president of San Jose-based Ritchie Commercial, a real estate firm.
The prospects for the office sector — despite rising vacancy rates in the wake of the coronavirus outbreak — are particularly strong in Silicon Valley, experts say.
“We have not seen any decline in commercial property values other than the troubled hotel sector,” Ritchie said. “For pure office space, clearly the investment market is showing that it expects a roaring full recovery.”
In the most recent high-profile transaction, Washington Holdings has bought the seven-building RioTech Park office campus that fronts on Rio Robles and North First Street, documents filed with Santa Clara County officials on April 22 show.
Washington Holdings paid $169.3 million for the office campus, which totals 375,000 square feet, according to county property records.
Among the other major purchases covering a period of less than a month:
— $630 million, Mountain View. Brookfield Properties on March 30 bought two big office buildings leased to Facebook, the site of the Showplace ICON Mountain View movie theaters, and a parking garage.
— $365 million, Sunnyvale. Tishman Speyer on April 15 bought a NetApp campus that includes four office buildings, two parking garages, and an amenities-rich open space.
— $100.5 million, Mountain View. A venture of Steelwave and Angelo Gordon & Co. on April 2 bought two office buildings from NortonLifeLock.
Investors have plunked down a jaw-dropping $1.26 billion in purchases in four weeks in deals for major office sites.
“No matter how you slice it, the health of the Silicon Valley office market is nothing short of miraculous,” Ritchie said. “It is amazing how strong and how resilient the office sector is.”
The transactions leading to the $1.26 billion in property transactions involve the two Mountain View sites, one in Sunnyvale, and the most recent deal for the RioTech Park complex in north San Jose. Several smaller deals have occurred for South Bay office properties during April that would drive the overall total higher.
“All the headlines, all the talk of an exodus from Silicon Valley, are dead wrong,” Ritchie said.