Big downtown San Jose office tower is bought, showing Silicon Valley market strength
SAN JOSE — A prominent downtown San Jose office tower has been bought in a deal that shows investors continue to hunger for choice properties in the central business district of the Bay Area’s largest city.
The office highrise, perched on a prominent corner across the street from San Pedro Square, has been purchased at a price that produced a big profit for the sellers, just two years after they had bought it, according to Santa Clara County public documents.
“This is indicative of strong interest in downtown San Jose,” said Eric Fox, an executive managing director with Cushman & Wakefield, a commercial real estate firm.
The tower, located at 160 W. Santa Clara St., was bought for $131.8 million, according to Santa Clara County property documents that were on file as of June 29.
“Downtown San Jose is still appealing even with all of the economic uncertainty right now with the coronavirus,” Fox said.
The 15-story office highrise totals 229,000 square feet, according to a post on the website for the sellers, Beacon Capital Partners.
The buyer was a group led by a private real estate investor John Barrett. Barrett is a principal executive with Burlingame-based Barrett Block Partners, according to public filings.
CBRE, a commercial real estate firm, has been seeking tenants for the office tower, listing posted on LoopNet show.
The latest deal arrives two years and two months after a 2018 transaction through which Beacon Capital Partners paid $101.5 million for the office tower. In 2014, the tower was bought for $81 million.
“This transaction is a good indicator of growing market interest,” Fox said. “Stuff is happening again.”
Downtown San Jose has captured more interest in recent years in the wake of revelations that Google intends to develop a major mixed-use neighborhood near the Diridon train station.
Separately, veteran and savvy developer Jay Paul Co. has begun construction on an office tower and will redevelop the outmoded yet strategically located CityView Plaza and transform the site into a modern tech campus.
And Adobe is dramatically expanding its three-tower downtown San Jose headquarters campus with the construction of an office highrise.
“Downtown San Jose has a lot of compelling attributes,” Fox said. “This is still the capital of the innovation center of the world.”