Vivotek's building at 2050 Ringwood Avenue, San Jose · 24,175 sq ft · about to sit empty
The situation
The team is moving to Delta's Fremont office, so this building is about to sit empty. Its current market value is likely around $7.6M. The real question is not whether to do something with it. It is which choice gets the most out of that money.
There are three things you can do with it. Here is what the numbers say about each, plainly.
What it is worth
Every choice below starts from this one number. 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.
Ask too much and it sits, like the empty buildings next door. Price it to the real market and it sells. Our pick is the middle.
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 right next door: 2040 Ringwood. Price it too high and it just sits.
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.
Keep the building and rent it to someone else. The rent looks like a decent return on paper. But it only works if you find a renter, and the money stays stuck in an old building the whole time.
Asking rents in the area run roughly $1.85 to $2.50 a square foot a month2, but that is what landlords ask, not what they get. This building is about to be empty, in an area already full of empty space, so a tenant could take a long time and cost real money to land. Any income figure is your advisors' to work out.
Sell this building and use the money to buy one Delta actually needs in Texas, where it is growing. A tax rule called a 1031 Exchange1031 Exchange. An IRS rule that lets you sell one investment building and move the money into another one without paying the profit tax right away, as long as you buy the replacement on time (45 days to pick it, 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. So the full ~$7.1M goes toward a building Delta was going to buy anyway, 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 put the cash into the business. No swap, no new building. Any tax owed would likely be due now, and Delta gets the sale proceeds as free cash to use however it wants. A growing company usually earns more on its cash than an old building earns in rent. This is the likely choice if the money is worth more in the business than tied up in a building.
The whole story, simply
Renting looks free, but it keeps the money stuck in an old building. That same money, freed up and put to work by the business, can earn more, and over time that gap adds up. The exact amounts are your advisors' to work out. This is just the shape of the idea.
Money left in the building (A) tends to grow slowly. Swapped into a Texas building Delta uses (B) it grows with that building, with tax potentially deferred. Put to work in the business (C) it can grow fastest. No dollar figures here, on purpose, just the pattern.
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.
Side by side
The same questions for all three, so you can compare them fairly. We compare each one to the first choice, renting. Short-term means the first year. Long-term means the years after. Numbers are rough until the real ones come in.
| 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 |
| Cash you can use | Low, tied up in a building | Some, a building you can sell | 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) frees up nothing and earns the least, and only if you find a renter.
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 the money stuck in a building losing value.
What we'd do
Get out of an empty building that is losing value, and put the money where it earns more: into the business, or potentially tax-deferred into the Texas growth Delta is already paying for. Either one beats leaving ~$7.1M stuck in an old building.
Every number, in the open
These are the property and market numbers behind the dossier, each marked confirmed, our best guess, or still waiting. Tax amounts and investment returns are left out on purpose, they are your tax and financial advisors' to work out.
| What it is | Number we used | How sure | Where it is from |
|---|---|---|---|
| Sale price | ~$7.6M | rough | Priced to sell; nearby sales suggest up to $8.2M; full pricing report still due |
| Selling costs | ~$0.5M | our guess | ~6%, normal |
| Left after costs, to reinvest | ~$7.1M | from the math | Sale price minus costs |
| Time to find a renter (A) | months to years | waiting | Waiting on Paul; 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, Paul's 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. Every link opens the source so you can check it yourself.
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.