Vivotek's building at 2050 Ringwood Avenue, San Jose · 24,175 sq ft · about to sit empty
The situation
The team is consolidating into Delta's Fremont office, leaving this building vacant. Its current market value is likely around $7.6M. The question is not whether to act, but which option realizes the most value from that capital.
Three options are available. This dossier reviews each one, with the supporting figures.
Valuation
Each option below proceeds from this figure. Based on nearby buildings that recently sold, 2050 Ringwood should sell for roughly $7.6 million, in a range of about $7.2 to 8.2 million. Here is how we get there.
Overpriced buildings in this submarket have remained unsold for extended periods. Priced to the market, the building transacts. We recommend the middle approach.
Throughout this dossier we use ~$7.6M (about $315 per sq ft), a realistic price. Priced to the stronger comps, $8.2M is possible.
| Address | Size | Built | Price/sq ft | Notes |
|---|---|---|---|---|
| 1321 Ridder Park Dr | ~36,030 SF | 1984 | $368 | Top of the range |
| 832 Charcot Ave | larger box | – | $320 | Middle, bigger building |
| 2205 Fortune Dr | ~31,445 SF | 1979 | $294 | Bottom of the range |
| 350 E Plumeria Dr | – | – | $231 | Older, sets the floor |
Recent sales ran from $294 to $368 per sq ft. For an older building like this one, a fair middle is about $300 to $340 per sq ft.
| Address | Asking price/sq ft | How long for sale | What it means |
|---|---|---|---|
| 2040 Ringwood Ave next door | $361 | ~911 days | Priced high, no buyer in over 2.5 years |
| 2109 O'Toole Ave | $360 | ~474 days | Almost fully rented, still no buyer |
| 193-199 Topaz St, Milpitas | $338 | ~474 days | For sale over a year |
| 1570 Oakland Rd | $342 | ~2 weeks | Newly listed, priced at the high end |
Buildings priced at $338 to $361 per sq ft have sat 15 months to over 2.5 years with no buyer. The clearest example is the adjacent property, 2040 Ringwood. Overpricing results in extended time on market.
Sold prices come from public county records (Santa Clara County). Asking prices and time-for-sale come from listing sites. Rough for now, to be confirmed with a full pricing report.
Retain the building and lease it to a tenant. The rental return appears reasonable on paper. However, it depends entirely on securing a tenant, and the capital remains tied up in an aging building throughout.
Asking rents in the area run roughly $1.85 to $2.50 a square foot a month2, though these are asking rates, not concluded transactions. This building will be vacant in a submarket with substantial existing vacancy, so securing a tenant may take considerable time and carry real cost. Any income projection is for your advisors to determine.
Sell this building and apply the proceeds toward a property Delta requires in Texas, where it is expanding. A tax rule called a 1031 Exchange1031 Exchange. An IRS provision permitting the sale of one investment property and reinvestment of the proceeds into another without immediate tax on the gain, provided the replacement is acquired within the required timeframe (45 days to identify, 180 days to close). The tax is deferred, not erased, and is owed later. Eligibility depends on the property and the taxpayer, so whether it applies here is for your tax advisor to determine. may let you swap one building for another and defer the tax, if you qualify. The full ~$7.1M is then applied to a building Delta intended to acquire regardless, and the tax owed could be deferred rather than paid now.
A couple of ideas to explore with your advisors, not a recommendation or a return estimate. What any of them earns is theirs to model.
Sell the building and deploy the proceeds into the business. No exchange, no replacement property. Any tax owed would likely be due now, and Delta receives the sale proceeds as unrestricted capital. A growing company typically earns more on its capital than an aging building earns in rent. This is the likely selection if the capital is worth more in the business than held in real estate.
Summary
Leasing appears to cost nothing, but it retains the capital in an aging building. The same capital, released and deployed in the business, may earn more, and that difference compounds over time. Exact amounts are for your advisors to determine. This illustrates the pattern only.
Capital retained in the building (A) tends to appreciate slowly. Exchanged into a Texas building Delta occupies (B) it grows with that building, with tax potentially deferred. Deployed in the business (C) it may grow fastest. No dollar figures are shown, by design; this illustrates the pattern only.
Illustration of the idea only. No dollar amounts, because the real numbers depend on Delta's return and its tax situation, which are for your financial and tax advisors to work out.
Comparison
The same criteria applied to all three, measured against the first option, leasing. Short-term refers to the first year; long-term to the years following. Figures remain preliminary pending confirmed data.
| A · Rent it outCompare to this | B · Sell and swap | C · Sell for cash | |
|---|---|---|---|
| Where the ~$7.6M goes | Stays in the building | ~$7.1M into a new building, tax potentially deferred | The proceeds, as cash to the business |
| Potential tax now | None | None, if a deferral applies | Likely due now (your advisor calculates it) |
| Income each year | Some rent, only if leased | No rent; a yearly tax write-off | Delta's own return on the cash |
| Over the long run | Grows slowly | A Texas building, tax potentially deferred | Can grow faster if the cash is put to work |
| Capital available to deploy | Low, tied up in a building | Partial, a saleable asset | Most, cash in hand |
| Helps Delta grow | No | Yes, buys a Texas building it needs | Somewhat, frees up cash |
| Work and risk | High, being a landlord in a slow market | Some, owning a building | Low, no building to run |
Read across each row to compare each choice to the first one, renting. Any income, return, or tax figures are examples only, for your own advisors to work out.
Selling for cash (C) frees up the most cash for the business to put to work. The Texas swap (B) could defer the tax and pays for a building Delta needs anyway. Renting (A) releases no capital and earns the least, and only upon securing a tenant.
Selling for cash (C) can build the most wealth if Delta earns more on the money than a building would, though any tax owed is likely due now. The Texas swap (B) may turn the sale into tax-deferred growth plus a building that gains value. Renting (A) is the weakest, with capital tied up in a depreciating building.
Recommendation
Exit a vacant, depreciating building and redirect the capital where it earns more: into the business, or potentially tax-deferred into the Texas expansion Delta is already funding. Either outcome is preferable to leaving ~$7.1M tied up in an aging building.
Inputs and assumptions
These are the property and market figures underlying this dossier, each marked confirmed, calculated, a rough estimate, or pending. Tax amounts and investment returns are deliberately excluded; they are for your tax and financial advisors to determine.
| What it is | Number we used | How sure | Where it is from |
|---|---|---|---|
| Sale price | ~$7.6M | rough estimate | Priced to sell; nearby sales suggest up to $8.2M; full pricing report still due |
| Selling costs | ~$0.5M | rough estimate | ~6%, normal |
| Left after costs, to reinvest | ~$7.1M | calculated | Sale price minus costs |
| Time to find a renter (A) | months to years | pending | Old building, slow market |
| Empty space nearby | ~12%, rising | confirmed | 2026 Silicon Valley Index |
| Rents being asked | ~$1.85 to 2.50 | confirmed | Per sq ft a month, asking prices: LoopNet, CityFeet, CommercialCafe |
| Yearly tax write-off (B) | 39-yr straight line | IRS rule | For a building Delta uses; IRS Pub 946 |
| Swap deadlines | 45 / 180 days | IRS rule | IRS swap rules |
The confirmed numbers link to their source. The rough and waiting ones are placeholders, to be swapped for real numbers once we have the pricing report, the original purchase price, achievable market rent, and Delta's tax advisor and target return.
Sources & references
We use neutral, outside sources, government data and public records, not other brokers' reports. Each link opens the source for independent verification.
We do not rely on other brokers' reports. Anything marked rough is a best estimate, to be checked against the real purchase price, current rents, and an advisor. This is not tax, legal, or investment advice.