Goodwill of Silicon Valley took advantage of a down market for commercial buildings and a surprise $10 million donation from Amazon.com co-founder MacKenzie Scott to snag a former tech company headquarters in San Jose for just $85 per square foot — a 78 percent discount off its 2012 sales price.
The social service nonprofit purchased an eight-story, 200,000-square-foot building that will accommodate its growth for future generations, according to Chris Baker, acting CEO of Goodwill of Silicon Valley.
The sale is just one of several recent examples of how Bay Area nonprofits are using the struggling commercial market to their advantage and buying buildings previously occupied by for-profit businesses. In September, the social services provider The Felton Institute bought an Oakland medical office building and in November the San Francisco AIDS Foundation bought 940 Howard Street in SoMa, which formerly housed AI data company Appen.
In this case, GWSV bought the defaulted $26.1 million first-lien mortgage on 1600 Technology Drive in San Jose from Wisconsin-based lender Northwestern Mutual Life Insurance for $17 million, or just $85 per square foot, according to public records and a press release from the nonprofit. The debt had climbed to $27.3 million by the time Goodwill took ownership using the deed-in-lieu of foreclosure process.
JLL marketed the debt on the 2001-built office/R&D building near the San Jose Mineta International Airport, according to a marketing site. The nonperforming loan reached maturity default in October 2024; the bidding process began in late November and closed on Dec. 17. Among the selling features were 5,000 amps of power, 25,000-square-foot floor plates and 21,000 square feet of existing lab space. JLL did not reply to a request for comment on the level of interest in the sale.
The defaulting owner was GI Partners, a private investment firm that bought the building in partnership with pension fund CalPERS, for $76.5 million in July 2012, according to public records and press reports from the time. It was among the first buys for the CalPERS-supported TechCore investment vehicle, which focuses on data centers, specialized technology corporate campuses and life sciences properties “located in primary markets and leased to industry-leading tenants,” according to the firm’s website.
Since 2012, TechCore has acquired 19 properties that add up to 3.6 million square feet of “stabilized core technology-advantaged real estate.” GI Partners did not reply to a request for comment.
At the time the building was purchased, it was the headquarters for microcontroller maker Atmel, which had just signed a 10-year lease. The company was acquired for $3.6 billion by Arizona-based Microchip Technology in 2016 and evidently moved out of the eight-story building after its lease was up, as it was sold empty.
Even with the dramatic discount over the last sale, the buy would not have been possible without an unrestricted $10 million donation from Scott, one of the country’s richest women with a net worth over $35 billion, even after giving away over $17 billion since her divorce from Jeff Bezos in 2019, according to Forbes.
The purchase utilized a combination of financial returns from GWSV’s social enterprises and the Scott donation, which was received at the end of 2020, Baker said. It was the largest single gift in the organization’s nearly 100-year history and just one of several multimillion-dollar donations the philanthropist and author made to Goodwills across the country that month during the depths of the pandemic, according to media reports from the time.
Given the substantial lab facilities, Baker said the organization will “keep an open mind on the best options to utilize the space.” But the current plan is to “create a resource center for the community GWSV serves” by housing other nonprofits in the building, as well as its own headquarters, job training and employment opportunity programs. The nonprofit has 17 retail stores but had its offices in a 75-year-old former Levi Strauss manufacturing plant at 1080 North Seventh Street.
GSWV also has plans to construct a new warehouse facility with state-of-the-art equipment and a focus on efficiency and sustainability in the next three years at the North Seventh Street location.
“Since 2020, we have navigated COVID-19 successfully and are now implementing a strategic plan to replace the outdated facilities and provide the platform for economic growth to fuel our mission service programs,” Baker said.
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