Goodman Snaps Up Office Campus in Milpitas for $40 Million

Goodman Group has purchased a 319,800-square-foot office and research campus in Milpitas for $40.4 million.

An affiliate of the Irvine-based investor bought the vacant five-building campus at 720 and 790 Sycamore Drive, 1511 Buckeye Drive, and 1610 and 1630 McCarthy Boulevard, the San Jose Mercury News reported. The seller was Analog Devices, based near Boston.

Cushman & Wakefield held the listing. The deal for the 17.3-acre property works out to $126 per square foot, or $2.3 million per acre.

The total purchase price for the empty tech campus near Tasman Drive and Interstate 880 suggests a plunge in South Bay building values.

The $40.4 million paid by Goodman was 47 percent below the assessed value of the five buildings and the land beneath them as of January 2024.

The value for the investor may be the 17.3 acres of land, according to Cushman & Wakefield.

“The campus offers the opportunity to redevelop the site to an industrial project, significantly increasing the density on the site,” Cushman & Wakefield stated in its brochure.

Big industrial sites are in relatively short supply in the South Bay, according to the brokerage.

“There is a lack of large, industrial redevelopment sites throughout Silicon Valley,” Cushman & Wakefield stated. “Demand from tenants for new, state-of-the-art industrial buildings remains high.”

The buildings picked up by Goodman include an 82,400-square-foot building at 720 Sycamore Drive; a 58,200-square-foot building at 790 Sycamore Drive; a 94,600-square-foot building at 1511 Buckeye Drive; a 42,100-square-foot building at 1610 McCarthy Boulevard; and a 42,600-square-foot building at 1630 McCarthy Boulevard. They were built in the early 1980s.

In February, Analog Devices also sold a 76,700-square-foot office building at 3550 North First Street in north San Jose for $18.5 million, or $241 per square foot, 40 percent less than its assessed value. The buyer was Irvine-based LBA Realty.

In 2022, the computer chipmaker sold a 128,000-square-foot industrial building at 275 South Hillview Drive in Milpitas for $32.8 million, or $256 per square foot. The buyer was Gem Capital, based in Chicago.

— Dana Bartholomew