TMG Partners, KKR Buy Skyport Plaza From Hudson Pacific Properties for $75.5M; Santa Clara County Signs 30-Year Lease

SAN JOSE, Calif. — TMG Partners, acquiring with accounts managed by KKR, has purchased Skyport Plaza in North San Jose from Hudson Pacific Properties for $75.5 million, and Santa Clara County has signed on as the anchor tenant at the site. The transaction, announced Oct. 16, 2026, delivers both a buyer and a tenant for two office towers that have sat empty since Qualcomm moved out.

Skyport Plaza Acquisition Details

Skyport Plaza is a mixed-use office and retail complex at 1650 Technology Drive, 1700 Technology Drive, 50 Skyport Drive and 90 Skyport Drive in San Jose. The four-building property totals approximately 435,000 square feet and was built in 2001. The $75.5 million purchase price works out to roughly $174 per square foot across the complex.

The office component consists of two eight-story buildings totaling approximately 393,000 square feet, with floor plates of about 25,000 square feet. The towers have been completely vacant since Qualcomm departed in 2022. Two retail buildings make up the remaining roughly 42,000 square feet and are approximately 97% leased, with a childcare facility, restaurants and cafés operating at the site.

Santa Clara County Lease at the North San Jose Towers

Santa Clara County will lease approximately 393,000 square feet, covering both office towers, under a 30-year term. The lease is expected to begin in the first quarter of 2029, following extensive renovations planned by the buyer. The county's tenancy was signed simultaneously with the acquisition.

The lease converts a fully vacant office asset into one with a long-term, public-sector occupant. The adjacent retail space offers an income-producing base during the renovation period.

Buyer and Seller Roles

TMG Partners is the sponsor on the buy side, with KKR-managed accounts participating as the capital partner. Hudson Pacific Properties is the seller. The sale removes a fully vacant office asset from the seller's portfolio following Qualcomm's 2022 move-out.

Silicon Valley Office Market Context

The transaction comes as the Silicon Valley office market shows modest improvement in vacancy alongside continued pressure on rents. CBRE reported third-quarter 2026 vacancy of 14.1%, down from 15.1% in the prior quarter, while average direct asking rents fell to $5.15 per square foot per month, down $0.12 from the prior quarter and $0.44 from a year earlier.

Kidder Mathews reported a higher regional vacancy rate of 15.9%, down 30 basis points from the prior quarter and 160 basis points from a year earlier, with average asking rents of $4.98 per square foot on a full-service gross basis.

Against that backdrop, a fully vacant office campus carries a different risk profile than a stabilized property, with value dependent on renovation capital, leasing downtime and tenant-improvement costs. Pairing the acquisition with a 30-year county lease addresses lease-up for the two towers ahead of the planned 2029 commencement.

Sources

• Kidder Mathews: Empty Qualcomm Towers in North San Jose Land Buyer and New Tenant in One Swoop
• Hoodline: Empty Qualcomm Towers in North San Jose Land Buyer and New Tenant in One Swoop