San Jose office complex is bought at discount to prior property value

SAN JOSE — A San Jose office campus has been bought at a steep discount to its prior assessed value in a deal that suggests the slump in Bay Area office prices has yet to run its course.

The three-building workplace hub in downtown San Jose was bought for $82 million in an all-cash deal by an affiliate of SFF Realty Partners, documents filed Oct. 8 at the Santa Clara County Recorder’s Office show.

In recent years, multiple office buildings in downtown San Jose have been bought at steep discounts to both their prior sales and their assessed values.

In the just-completed deal, private equity real estate firm KBS sold the campus, which is located on Almaden Boulevard between West Santa Clara Street and West San Fernando Street, according to a public filing.

SFF Realty bought the three buildings and an adjacent parking structure through an all-cash deal.

The office buildings have addresses of 1, 55, and 99 Almaden Blvd. and total 416,100 square feet. The parking garage provides 1,264 spaces.

Zoom Communications has established its corporate headquarters in the 55 Almaden building and leases 25% of the property’s office space, according to KBS.

The new purchase price is 54.7% below the office property’s estimated value of $181.1 million as of January 2026, according to the Santa Clara County Assessor’s Office.

Falling real estate values in a community can imperil a crucial revenue stream from property taxes for cities, counties, regional agencies and school districts.

In 2015, KBS paid $150 million for the office complex. Over the years, KBS presided over wide-ranging upgrades and improvements at the property.

“The campus benefited from more than $49 million in capital improvements during our ownership, helping maintain the property’s competitive position in the market,” said Tim Helgeson, a KBS senior vice president.

Despite these efforts, the Almaden office center was engulfed by the economic tides that have eroded commercial property values in downtown San Jose and many other Bay Area markets.

In 2017, an office tower at 303 Almaden, a couple of blocks from the just-bought campus, was purchased for $80.2 million, or $509 a square foot. That was a record at that time.

In 2019, an office high-rise at 50 West San Fernando St. was bought for $238 million, or $667 a square foot, a deal that eclipsed the previous record set just two years earlier.

The economic dislocations and business disruptions ushered in by the coronavirus also served to wash away property values for downtown San Jose office buildings.

The challenges intensified due to tech breakthroughs — some invented by Zoom itself — that resulted in fewer people going to work in person, helping to send office vacancies higher throughout the Bay Area.

An early warning sign arrived in 2023 when the 303 Almaden building was bought for $23.8 million, or $151 a square foot, or 70% less than the price just four years earlier for the same tower. Morgan Hill-based Shoe Palace chief executive officer George Mersho led the buying group.

Mersho extended his bargain hunting in downtown San Jose. A few months later in 2024, the footwear CEO led a group that bought a two-building office complex at 111 North Market St. and 111 West St. John St. for $34.2 million, or $105 a square foot.

Then in 2025, the Santa Clara Valley Transportation Authority paid $63.7 million, or $163 a square foot, for an office tower at 488 South Almaden Blvd.

Some encouraging trends could be emerging for the downtown San Jose office market, however, even in the face of depressed prices compared with the pre-coronavirus period.

The market low was around $105 a square foot in early 2024 for the second Mersho-led deal.

The next two deals for big office properties downtown produced a $163 a square foot price in 2025 with the VTA deal and a $197 a square foot value for the just-bought 55 Almaden office campus.