SANTA CLARA — A big office and research building in the South Bay has been bought for more than $15 million by a local real estate investor who has begun to scout for tenants to fill up the mostly empty property.
The building, located at 3200 Patrick Henry Drive, has been acquired for $18 million by Modesto Retail Group, according to documents filed on Feb. 20 with the Santa Clara County Recorder’s Office.
“We bought this as an investment and now we are looking for tenants for the building,” said Habib Zarerani, a San Jose-based real estate executive who heads up San Jose-based Modesto Retail Group.
Bigler Lidgate Family Trust was among the family-headed entities that sold the building to Modesto Retail, the county documents show.
The building totals 105,100 square feet, according to the LoopNet commercial property listing service.
The family trusts that sold the building also provided $9 million in seller financing to Modesto Retail, according to the county documents.
Sellers often provide financing to a buyer as an incentive to complete a property deal.
In January 2024, the building was valued at $16.4 million, according to estimates posted by the Santa Clara County Assessor’s Office.
The building, which has a prime location in one of Silicon Valley’s tech hubs, is about 90% vacant, Zakerani estimated.
The Bay Area office market is struggling with vacancy rates that are stubbornly high and rents that remain sluggish.
However, a slew of office deals toward the end of 2024 raised hopes that 2025 could begin to produce more robust results for the office markets in the major urban centers of the South Bay, East Bay and San Francisco. The San Francisco office market in particular has nosedived.
“We could have bought much larger buildings a two-hour flight away from the Bay Area, but we wanted to invest locally,” Zakerani said.