A three-building office campus in the heart of downtown San Jose has changed hands for $82 million, a price that works out to roughly half of what the same property fetched just over a decade ago. SFF Realty Partners is the new owner of The Almaden, a 416,000-square-foot Class A complex at 1 Almaden Blvd., and the deal lands at a moment when downtown San Jose's office market remains far emptier than the rest of Silicon Valley.
The purchase, reported by Bisnow, has SFF Realty Partners buying the campus at 1, 55 and 99 Almaden Blvd. from KBS REIT III. The sale price pencils out to about $197 per square foot, a steep drop from the $360 per square foot KBS paid when it acquired The Almaden in 2015, according to the same report. KBS had spent roughly $49 million on capital upgrades to the property during its decadelong ownership, per Bisnow.
The Almaden campus itself was built between 1979 and 1982, according to Bisnow's reporting, and sits on 5.81 acres in downtown San Jose, according to KBS, which put the campus's total office space at 416,126 square feet. Zoom Video Communications renewed and expanded its footprint there in 2019, taking its lease up to 87,025 square feet, KBS said at the time. A marketing listing from Cushman & Wakefield shows a 55,548-square-foot space at the property available for lease, touting a full gym with lockers and showers, a common conference center, an on-site cafe, and proximity to Caltrain, light rail and bike-share stations.
A Downtown Still Lagging the Broader Market
Downtown San Jose's office availability remained above 40% in the third quarter of 2026, Bisnow reported, even as availability across all Silicon Valley submarkets sat at 21.8% over the same period. That gap underscores how unevenly the region's office recovery has played out. Mercury News reported that downtown San Jose's vacancy rate stood at 30.8% in the first quarter of 2026, a dramatic climb from the 12.8% vacancy the submarket posted in the fourth quarter of 2019, before the pandemic.
The broader Silicon Valley picture has been brightening. Vacancy across the region fell to 15.9% in the third quarter of 2026, down 30 basis points from the prior quarter and 160 basis points from a year earlier, according to a Kidder Mathews market report. Total availability across Silicon Valley dropped to 16.3% in the same quarter, and the region logged 491,072 square feet of positive net absorption, its fourth straight quarter of gains, per Kidder Mathews. Leasing activity hit 2.9 million square feet in the third quarter, up 97.2% from a year earlier, while new construction has nearly dried up, with only about 60,188 square feet underway and nothing delivered during the quarter.
AI Demand Fuels Leasing Elsewhere, but Not Yet Downtown
Much of that momentum has been driven by artificial intelligence companies racing to lock down space. AI firms accounted for 93% of all Silicon Valley venture capital funding in 2026, according to an Avison Young market report, which also found regional leasing reached 4.74 million square feet in the first half of 2026, a 56.4% jump from the same period a year earlier. Recent headline deals illustrate the trend: OpenAI leased several Mountain View buildings on Ellis Street totaling roughly 439,000 square feet, Infineon took 219,200 square feet in north San Jose at 6001 America Center Drive, and Databricks leased space in downtown Sunnyvale plus an additional 180,400 square feet at 100 Altair Way, according to siliconvalley.com.
Yet that AI-driven demand has not reached the heart of the South Bay, per Bisnow's reporting on the deal. SFF Realty Partners is nonetheless betting that downtown San Jose will eventually capture spillover demand that tightens vacancy in the region's hotter submarkets, the outlet reported. The firm's managing partner, Casey Hold, said downtown San Jose has experienced a major change in safety, vibrancy and energy over the past three to five years, according to Bisnow. Hold's comments came as the outlet noted that the most-coveted San Francisco office buildings have reached nearly full occupancy, a dynamic the firm appears to be wagering will eventually extend south.
Part of a Broader Buying Spree
The Almaden purchase is not an isolated move. SFF Realty Partners deployed more than $160 million in the third quarter of 2026 to acquire 580,000 square feet of office space, Bisnow reported, a spree that also included office properties at 384 Santa Trinita Ave. in Sunnyvale, along with 2350 and 2390 Mission College Blvd. and 2550 Walsh Ave. in Santa Clara. San Jose's downtown office market effectively emptied out following the pandemic, according to Bisnow, leaving investors like SFF Realty Partners to weigh deep discounts against a recovery timeline that remains uncertain for the submarket specifically.
City leaders have tried to accelerate that recovery with incentives of their own. San Jose's downtown leasing incentive program, approved in 2024, includes a two-year business tax exemption for new owner-operators and tenants that lease at least 2,500 square feet of office space for a minimum of four years, according to siliconvalley.com. Whether such measures, combined with the kind of spillover demand SFF Realty Partners is counting on, can close the gap between downtown San Jose and the rest of Silicon Valley remains to be seen.
