MOUNTAIN VIEW — A big office building in Mountain View has been bought by a savvy and veteran buyer for more than $100 million in a deal that serves up fresh evidence that real estate values have withered.
The building, located at 600 Clyde Avenue in Mountain View, was bought for $108.1 million, according to documents filed on Aug. 26 at the Santa Clara County Recorder’s Office.
DivcoWest, one of the Bay Area’s top real estate firms, acted through an affiliate to buy the office building in an all-cash deal, the Santa Clara County public filing shows.
Google pre-leased the building before it was completed. The building totals 190,000 square feet.
Renault & Handley, a veteran real estate firm, developed the 600 Clyde site and landed Google as a tenant for the entire building.
Yet even with Google as a tenant, it appears the building suffers from economic maladies that have begun to afflict a growing number of office properties in the Bay Area.
In May 2023, Google put the building up for sublease, part of the search giant’s ongoing efforts to right-size its office space in the Bay Area and nationwide.
In January 2024, the building had a value of $188.4 million, according to the latest estimate from the Santa Clara County Assessor’s Office.
This means the purchase price was 43% below what the Assessor’s Office estimated was the building’s value as of January 2024.
Record-high vacancy levels, feeble rental rates, a contracting tech sector and a growing number of foreclosures have created an ominous landscape for Bay Area office buildings.
The Bay Area office market has become so weak that developers have largely lost their respective appetites for any major new projects unless they have been able to land a tenant before construction begins.