Why Investors Are Hungry for Downtown San Jose Office Properties

The downtown San Jose office sales market is red hot, with institutional money getting involved more than ever. Here are a couple of the top summer deals, including one announced just this week.

Invesco Real Estate and Harvest Properties paid $62M for SV Towers, a two-building, 413k SF complex at 75 E Santa Clara St and 4 N Second St. Here's Harvest Properties project director Kathryn Collins, who told us at a Bisnow event in June her company also is under contract to buy a historic office building in Oakland.

KBS Real Estate Investment Trust III has agreed to buy Almaden Financial Plaza, a three-building Class-A office project at 1, 55 and 99 Almaden Blvd—one of the hottest corners in downtown. KBS told Bisnow this morning it doesn't comment on transactions that haven't closed yet.

With well over 100 high-tech companies packing buildings downtown, it's no wonder sellers are putting trophy buildings on the market. Investors began to show interest in the downtown submarket at the close of 2012 with DiNapoli Capital Partners' $63M purchase of 160 W Santa Clara (above), a 211k SF office building, which set off a run with three more purchases finalized within the following month, Cushman & Wakefield tells us. The KBS purchase will bring YTD figures for San Jose office sales to more than 1M SF.

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