8×8 headquarters in Campbell bought by New York investors

CAMPBELL » A large office building in Campbell that is the headquarters of a cloud services company has been scooped up by investors from New York City.

Creekside@17, a new office building perched prominently along Highway 17 in Campbell, has been bought by an affiliate controlled by Manhattanbased Joss Realty Partners, according to public documents filed with Santa Clara County officials on March 2.

The deal suggests that buildings that are fully leased to Silicon Valley tech companies with sturdy financials can be a magnet to investors around the country.

The modern office building was bought for $139 million by the affiliate, 675 Creekside Owner, the county records show.

Brokers Phil Mahoney, Mike Saign and Todd Shaffer of Newmark Knight Frank, a commercial real estate firm, have been marketing the Creekside@17 office building.

Joss Realty Partners, the new owner of Creekside, also owns properties on the East Coast, the company’s website shows.

DBR Investments Co. Ltd., whose principal offices are in Manhattan and the Cayman Islands, provided $83.4 million to finance Joss Realty’s purchase of Creekside@17, county mortgage documents show. Several corporate and public filings show DBR Investments is a unit of Deutsche Bank, the financial services colossus.

After South Bay Construction had developed the building, the real estate firm leased the entire office project to 8×8 in 2019. The deal enabled 8×8 to shift its corporate headquarters to Campbell.

“The builder’s strategy was to develop the building, sign a tenant, and then find a buyer,” said David Vanoncini, a managing director for the San Jose office of Kidder Mathews, a commercial real estate firm.

“The lease to a good tenant ends up dictating the purchase price.”

Over the one-year period that ended in December, 8×8 generated $418.5 million in revenue, according to the Yahoo Finance site. For the company’s fiscal year that ended in March 2019, 8×8 produced $352.6 million in revenue.

“South Bay Construction wants to develop buildings, and then sell them to investors who want the cash flow from rents,” Vanoncini said.

The five-story Creekside@17 building, which totals 178,000 square feet, is a short distance from trendy and bustling downtown Campbell as well as the revamped Pruneyard retail, restaurant, and office complex.

“It’s a beautiful building, it’s unique,” Vanoncini said. “Because it’s fully leased to a tech company, the building becomes a lot more valuable.”

Contact George Avalos at 408-859-5167.