First Citizens Bank Buys Palo Alto Office for $82 Million

First Citizens Bank & Trust snapped up an office building in downtown Palo Alto for a price harkening back to the Bay Area’s pre-pandemic heyday.

The Raleigh, North Carolina-based financial institution bought the 250 University Avenue building for $82 million, the Mercury News reported. The deal works out to about $1,969 per square foot, aligning with values prevalent in Palo Alto and other high-demand office markets before the pandemic’s outbreak five years ago.

Inspire Real Estate Holdings sold the property. The Florida-based company bought it from Hewlett-Packard in 2003 for an undisclosed price.

The four-story building spans approximately 38,000 square feet, according to the Silicon Valley Business Journal. The property is near Stanford University and the Palo Alto Caltrain station. Ground-floor retail tenants including Salt & Straw, Nola, Citibank and the Shade Store.

Other office buildings in downtown Palo Alto that fetched similar prices per square foot before the pandemic include 192 Lytton Avenue for $23.1 million, or $2,551 a square foot; 530 Lytton Avenue for $117.5 million, or $2,156 a square foot; 150 Forest Avenue for $26 million, or $2,153 a square foot; and 385 Sherman Avenue for $138 million, or $2,030 a square foot.

Elsewhere in Palo Alto, office property sales have run the gamut from bargain-basement prices to nearly reaching pre-pandemic values, amid the market’s rocky recovery.

Last year, Hudson Pacific Properties sold a 182,700-square-foot office campus at 4001-4009 Miranda Avenue to an undisclosed buyer for $23 million, or about $126 per square foot. In 2023, Greenbrae-based Douglas Living Trust bought a 30,000-square-foot office building at 2555 Park Boulevard in south Palo Alto from Kenson Ventures for $58 million, or about $2,000 per square foot.

In 2023, after the collapse of Silicon Valley Bank, First Citizens Bank & Trust bought $167 billion in assets and $119 billion in deposits from the failed institution. It’s now a division of First Citizens BancShares, which also owns First Citizens Bank.

— Chris Malone Méndez