A significant transaction has taken place in the South Bay region of California, as the tech campus known as @Central has been sold for $55.5 million. This acquisition, finalized on November 26, 2023, highlights ongoing challenges in the Bay Area office market, which has yet to recover to its pre-pandemic valuations. The buyer, LBA Realty, acquired the property located at the intersection of Central Expressway and De La Cruz Boulevard from an affiliate of Swift Real Estate Partners.
The deal reflects a broader trend of declining office values in Silicon Valley. Records indicate that Swift Real Estate Partners purchased the @Central campus for $97.6 million in 2018, signifying a decrease of approximately 43.1% in value over the five-year period. Despite efforts to enhance the property’s appeal through renovations, the campus has struggled to attract major technology tenants.
According to a marketing brochure from Newmark, a commercial real estate firm, the @Central campus spans 298,300 square feet and includes multiple addresses along De La Cruz Boulevard. The brochure noted that up to 92,700 square feet of space is currently available for leasing, indicating ongoing challenges in filling the campus with tenants.
In an effort to improve the property, Swift Real Estate Partners initiated extensive renovations shortly after acquiring the campus. These enhancements included new front facades and the addition of outdoor amenity areas, designed to appeal to large, single-tenant tech companies. Despite these investments, demand for the office and research spaces has not rebounded as anticipated.
The current market conditions have led to a significant shift in leasing dynamics. With falling property values, landlords are now positioned to offer competitive rental rates, aiming to attract tenants seeking office space at more favorable prices. This trend presents both challenges and opportunities for firms in the commercial real estate sector.
LBA Realty, the new owner of the @Central campus, is a well-established entity in the real estate market, with a diverse portfolio encompassing various asset classes. The firm remains active in the Bay Area, navigating the complexities of a commercial property landscape that continues to evolve in the aftermath of the COVID-19 pandemic.
As the Bay Area office market contends with these challenges, the acquisition of the @Central campus serves as a reminder of the shifting tides within the region’s commercial real estate sector.
