Tidewater Buys Seven Tech Buildings in Sunnyvale for $101M

Tidewater Capital has bought a seven-building tech campus in Sunnyvale for $100.8 million — nearly half what it traded for five years ago.

An affiliate of the San Francisco-based investor bought the 431,100-square-foot office and research campus surrounding 935 Stewart Drive, the San Jose Mercury News reported. The deal works out to $234 per square foot.

The sellers were Houston-based Hines and New York-based Goldman Sachs, which initially listed the property at Stewart and De Guigne drives early this year for $143 million, or $332 per square foot.

Hines and Goldman Sachs bought the 21.4-acre campus in 2019 for $188 million, or $436 per square foot. That’s 46 percent more than the property sold for five years later.

A shift to remote work and growing office vacancies, coupled with higher interest rates and lower rents, have severely impacted the office market across the Bay Area and beyond.

In Downtown San Jose, office values have plummeted.

They include an office building at 303 Almaden Boulevard that sold in December for 70 percent below its prior price, according to the Mercury News.

In February, a two-building office complex at West St. John Street and North Market Street was bought for a 77 percent reduction from its previous purchase value.

It’s unclear what Tidewater Capital intends to do with seven office buildings in a prime Silicon Valley location. The addresses, and occupancy rate, of each of the properties were undisclosed.

Tidewater Capital, founded in 2013 by Craig Young, announced last fall it had secured more than $200 million in equity commitments for its latest fund, allowing more real estate investment in the Bay Area, according to the San Francisco Business Times. The firm’s assets under management are unknown.

In January, the private equity firm notched final approvals on two large-scale housing projects in Oakland — a 289-unit residential development in West Oakland and a 381-unit project in the East Bay city’s struggling Downtown.

In August, the firm surrendered a historic office building at 1440 Broadway in Downtown Oakland to its lender after defaulting on more than $25.5 million in debt.

— Dana Bartholomew