By Meghan Hall
An office and research and development complex in Milpitas has attracted a local investor, even as office vacancies remain high. In a deal that closed last Friday, the South Bay Tech Center in Milpitas sold for $35.3 million. The buyer is an entity affiliated with Tron Do of Intelli LLC, while the buyer is tied to Newport Beach, Calif.-based Benlin Properties.
Intelli also procured a $21.2 million loan from Cathay Bank to fund the transaction, according to the The Mercury News, who was the first to report on the deal. Located at 1603 South Main Street, the office park totals six buildings spanning about 161,000 square feet.
Data from CommercialCafe shows the Class B property was originally constructed in1987. 484 parking spaces are available, and the buildings sit on 11.14 acres. The complex has a number of office R&D vacancies, ranging from around 1,500 square feet to more than 6000 square feet.
Investor interest in assets in Silicon Valley, including Milpitas, persists, even as the market’s contraction continued into the end of the year. The fourth quarter of 2020 saw the Silicon Valley office market face its fifth consecutive quarter of negative net absorption, at 364,215 square feet. However, a recent report from Newmark states that while not ideal, it was the least amount of negative net absorption seen by the market during 2020. Overall vacancy in Silicon Valley came to 11.28 percent.
“So while low absorption numbers and increasing vacancy rates may look like bad signals for a single quarter, both of these metrics are showing more movement towards recovery than they have shown since the beginning of the year,” the report notes.
A couple of significant sales have also bolstered the Silicon Valley office market. The Coleman Highline traded for $275 million, or $720 per square foot, to Blackstone. Valley Green Road, in Cupertino, traded for $98 million, or about $719 per square foot. Leased by Apple, the property was acquired by Taipei.
“While office markets across the globe are still feeling the effects of the ongoing pandemic, the slight improvements in the Silicon Valley office market are positive signs in an otherwise bleak year,” states Newmark. “Although the office market still has adversity to face in the coming months, ending the year on a relative high note hopefully signals that Silicon Valley is well-positioned to have a stronger 2021.”