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South Bay office and research building has been acquired by a local real estate investor for over $15 million. The property, located at 3200 Patrick Henry Drive in Santa Clara, was purchased by Modesto Retail Group for $18 million, according to county documents filed on February 20th. Habib Zarerani, head of San Jose-based Modesto Retail Group, plans to scout for tenants to fill the mostly empty building.
The property totals 105,100 square feet and was valued at $16.4 million in January 2024, according to the Santa Clara County Assessor's Office. The sellers provided $9 million in financing to Modesto Retail as part of the deal. Zarerani estimates that the building is about 90% vacant.
The Bay Area office market continues to struggle with high vacancy rates and sluggish rents. However, recent office deals towards the end of 2024 have raised hopes for improved results in 2025. Despite this, the San Francisco office market has seen a significant decline. Zarerani notes that Modesto Retail could have invested in larger properties elsewhere but chose to invest locally.
