The Bay Area office market is not quite the ghost town some expected. Office trading has mounted a surprise late-year comeback, and San Jose is at the center of a flurry of deals. Tech employers and well-funded landlords are leading the buying, targeting buildings that were marked down during the downturn. Most of the action is clustered in a handful of submarkets where newer, amenity-rich space with large floorplates can still pull in tenants.
According to CoStar, year-to-date office sales across San Francisco, San Jose and the East Bay totaled roughly $6.2 billion, about a 100% jump from 2024, and the East Bay and San Francisco recorded more transaction activity despite persistently high vacancies. That surge reflects a mix of tenant expansions and opportunistic investor trades. Brokers say the deals landing at the top of the pile are the ones with flexible layouts and modern amenities.
San Jose Is Leading The Charge
San Jose has emerged as the hotspot as technology companies hunt for space and pin down new South Bay offices. As reported by Colliers, Silicon Valley recorded 96,697 square feet of net absorption in Q3 2025 and technology firms made up about 80% of tenant demand. Those leasing dynamics help explain why buyers are zeroing in on the market. The gains are showing up in sales when tenants convert leases to long-term occupancy or when investors bet on re-tenanting space.
AI Hiring Is Lifting Leasing
AI hiring and venture funding are tugging tenants back toward the office, especially in high-quality buildings and mixed-use hubs. As outlined by CBRE, the Bay Area has added substantial AI-skilled talent, and AI-related companies account for a large share of recent leasing. That in turn is creating demand for investment-grade office product. Buyers active today are often wagering that occupancy and rents will look better a few years down the line.
Buyers Are Both Opportunistic And Strategic
Not every deal involves a glittering trophy tower. Some buyers are scooping up buildings at deep discounts. Nonprofit Goodwill of Silicon Valley bought an eight-story, 200,000-square-foot building in San Jose in a deed-in-lieu transaction for about $17 million earlier this year, a move reported by The Real Deal. Transactions like that highlight how local owner-users and nonprofits can be the marginal buyers in today’s market, while institutional capital cherry-picks the rest.
At the same time, shiny new offices with amenities are drawing real tenant interest. One Santana West at Santana Row has landed multiple AI tenants and large professional-services leases, pushing occupancy for that single building well above the market average. Industry coverage notes that Etched and Securiti.ai signed combined leases that added tens of thousands of square feet to the property’s roster, illustrating how one modern project can soak up big blocks of space in the South Bay, as reported by CRE Daily. Those kinds of wins are a major reason investors are zeroing in on submarkets with new, efficient product.
All told, the numbers reveal a split market. Older, awkwardly laid-out buildings still trade at steep discounts, while best-in-class space and strategic tech purchases are lifting overall sales volumes. Tech giants that are expanding locally, from campus acquisitions to targeted office leases, are part of that story, as our reporting on Nvidia's Santa Clara campus push shows.
