The six-story office tower at 400 Castro Street in downtown Mountain View has changed hands for $121.5 million, with law firm Fenwick & West still occupying every square foot more than two decades after the building went up. Real estate giant Tishman Speyer sold the fully-leased, 138,681-square-foot property to San Francisco-based Spear Street Capital, a deal that works out to roughly $876 per square foot in one of Silicon Valley's tightest downtown office corridors.
Tishman Speyer, based in New York, developed the LEED Platinum-certified building in 2002 and has held onto Fenwick & West as its anchor tenant ever since, according to The Real Deal. The building's 100 percent occupancy at the time of sale, paired with 543 parking spaces, made it an attractive target even as commercial real estate elsewhere has cooled. Ground-floor retail tenants Cascal restaurant, Peet's Coffee and Sweetgreen round out the property, per CommercialSearch.
Eastdil Secured represented Tishman Speyer in the transaction, with the firm's Nate Jones leading the team, the article notes. Maggie Kadin, whose role in the deal was cited in the reporting, said the closing reflected continued demand for well-located, institutional-quality office assets — a read that lines up with the broader numbers coming out of the region this year.
A Long Hold Pays Off
The sale caps a lucrative run for Tishman Speyer, which recapitalized the property back in 2012. Since that recapitalization, the seller achieved a 17.4 percent gross internal rate of return, equal to a 1.9x equity multiple, and a net internal rate of return between 15.8 and 17.0 percent, according to RENtv. That 14-year holding period underscores just how durable a fully-leased, transit-adjacent Class A asset can be in downtown Mountain View, even through multiple economic cycles.
Spear Street Capital, founded in 2001, has managed more than $11 billion in office property investments across over 85 assets in North America and Europe, per its own company profile. The firm has been active elsewhere in the Bay Area too, having previously owned the Rolling Meadows office park, which Digital Realty is buying for $81.5 million after Spear Street later defaulted on a loan, as Hoodline previously reported, and an office campus in Chantilly, Virginia.
How the Price Stacks Up Locally
At $876 per square foot, the 400 Castro Street deal outpaces several other recent South Bay office sales. Down the road in Sunnyvale, Apple purchased 684 West Maude Avenue from Union Investment and Metzler Real Estate for $162.2 million this year, or about $833 per square foot, according to the seed reporting. In Santa Clara, the Great America Commons complex — a 634,760-square-foot property — traded for $488 per square foot when Ellis Partners and The Baupost Group bought it from PGIM for $310 million.
Still, the biggest recent benchmark in Mountain View itself remains PSAI Realty Partners' $193 million purchase of Mountain View Corporate Center at 331 East Evelyn Avenue, which Hoodline covered in a January report as the most expensive office sale in the city over the past five years. Mountain View currently ranks second in Silicon Valley for average asking office rents at $7.65 per month per square foot, trailing only Palo Alto's $8.69, while Colliers pegs the region-wide average at $5.52 per square foot.
AI Demand Fuels the Leasing Boom
The 400 Castro Street sale lands amid a broader surge in Silicon Valley office leasing, with leasing activity accelerating across the region, according to Commercial Search. Office rents and Class A rates were also part of the quarter's market picture. Much of that momentum has been credited to expanding artificial intelligence and technology firms hunting for space near downtown Mountain View.
Enterprise AI startup Glean expanded its office footprint near downtown Mountain View this spring to support its 1,000-person workforce after raising $765 million in cumulative venture funding, as Hoodline reported at the time. OpenAI, meanwhile, was in talks last December over a 449,000-square-foot, five-building campus on Ellis Street. Elsewhere in the South Bay, Hewlett Packard Enterprise sold its Sunnyvale campus to New York-based Bluerock for $331 million this month in a sale-leaseback deal, one of the year's largest South Bay commercial transactions.
Growth Debate Simmers on Castro Street
Not everyone in Mountain View is cheering the continued flow of institutional capital into downtown office towers. A recent candidate forum covered housing and office space. The debate leaves an open question for landlords like Spear Street Capital about how much runway remains for future office expansion along the same stretch of downtown where its newly acquired building now sits.
