SAN JOSE — A North San Jose building bought at a discount compared to its prior value underscores the ongoing hard times for the Bay Area office market.
Paceline Investors, acting through an affiliate, purchased an office and research building at 2581 Junction Ave. for $12.2 million, according to documents filed on April 15 with the Santa Clara County Recorder’s Office.
The purchase price was 61.9% below the $32 million an affiliate of Nautilus Global Commercial Real Estate paid in 2018 for the 92,900-square-foot building, county real estate files show. It also was well below the $33 million asking price in 2025.
Office and research building at 2581 Junction Ave. in north San Jose, seen on April 16, 2026. (George Avalos/Bay Area News Group)
Lobby area of a research and office building at 2581 Junction Ave. in north San Jose, seen on April 16, 2026. (George Avalos/Bay Area News Group)
The building is rented to Ensurge Micropower, a battery maker. Ensurge has been seeking to sublease the building, according to real estate sources.
San Francisco-based Paceline is an active Bay Area real estate investor, according to the company’s website.
In 2021, the company engaged in a shopping spree for office buildings in Alameda, paying $129.8 million for several tech buildings.
The discounted price Paceline paid for the North San Jose building is part of a pattern of slumping values for office buildings in the Bay Area, a slide that has morphed at times into loan defaults and foreclosures.
One bright spot of late: Tech companies have begun to lease or purchase office space at a heightened pace in the South Bay, a trend that has helped to reduce the amount of empty office spaces.