South Bay tech campus is bought for $50 million-plus as office values fade

"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."

"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."

LBA Realty paid $55.5 million for the @Central tech campus at Central Expressway and De La Cruz Boulevard. The property previously sold for $97.6 million in 2018, making the new price 43.1% below the prior purchase. The campus totals 298,300 square feet across multiple De La Cruz addresses and had as much as 92,700 square feet available for lease. Swift Real Estate undertook large-scale renovations including new front facades and outdoor amenity areas to attract large single-tenant tech users. Falling values have pressured landlords to offer lower rents and reflect ongoing weakness in the Bay Area office market.

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