SANTA CLARA — A big tech campus in Santa Clara has landed a new owner in a property purchase that suggests office market values continue to wobble during the early stages of 2025.
The office hub on Jay Street in Santa Clara was bought for just under $21.2 million, according to public documents filed on Feb. 28.
Four Corners Properties, a Los Altos-based real estate investment firm headed up by Bruce Burkard, bought the office campus through an all-cash deal, a Santa Clara County Recorder’s Office grant deed shows.
The tech campus has addresses that include 3250, 3250 and 3270 Jay Street in Santa Clara. The two-building office complex is near the interchange of U.S. Highway 101 and San Tomas Expressway.
The tech campus totals 149,100 square feet, according to a marketing brochure for the sale of the complex that was circulated by Colliers, a commercial real estate firm. Colliers brokers Andy Zighelboim, Kevin Moul, Bob Gilley and Brad Idleman were marketing the building for sale at the time of the transaction.
This real estate deal suggests that economic maladies still afflict the Bay Area office market, even years after the end of government-mandated business shutdowns to combat the spread of the deadly coronavirus.
Why? The price that Four Corners Properties paid was just one-fourth of its prior value.
As of January 2024, the tech campus had an estimated value of $80.1 million, according to documents on file with the Santa Clara County Assessor’s Office.
This means Four Corners paid a price that was 73.6% below the most updated assessed value for the office campus.
Commercial real estate’s slumping values are poised to become a widening challenge for Bay Area city, county, and regional agencies, as well as public school districts, that depend on property taxes for some or much of their revenue.
Lower prices for office, retail and hotel buildings might do more than slow gains for property tax revenue. The slumping values might even cause property tax revenue to decrease.
Either outcome could squeeze government coffers over the next year or so should the value slump persist.
The just-bought Jay Street tech campus in Santa Clara was once the headquarters of ServiceNow, a software company that provides cloud-based services. In recent years, ServiceNow shifted its headquarters a short distance away to a Santa Clara site on Lawson Street.
It wasn’t immediately clear if the campus was empty at the time of the transaction.
Four Corners Properties is a veteran real estate firm that was founded in 2005 and focuses solely on commercial real estate investment and development endeavors in the Bay Area.
Despite the challenges of owning an office complex in a tough market, the company states on its website that it’s been successful through both ups and downs in the commercial real estate sector.
“We have navigated multiple market cycles,” Four Corner Properties states on its website. “We are committed to maximizing value for our investors.”