BEA sale puts San Jose's 'Sobrato building' back on market

The 381,000-square-foot Almaden Tower in downtown San Jose is expected to offered for sale within days, according to a source with direct knowledge of events.

Known by many as the Sobrato building -- after the property's developer -- the 17-story tower was acquired by San Jose-based BEA Systems Inc. last year.

But the European Union's approval of Oracle Inc.'s acquisition of BEA has freed Oracle to sell the structure, sources said. Redwood City-based Oracle (NASDAQ:ORCL) announced the EU blessing April 29.

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The decision has been expected for months, said Mark Schmidt, managing director in San Jose for commercial real estate brokerage CB Richard Ellis.

"Everybody knew it was going to happen, if you look at what Oracle has done in the past" after it acquired other companies, he said. "The market was hoping that it wouldn't, but I don't think it's a shock to anyone."

Richie Commercial calculates that vacancy rates in downtown San Jose's best buildings will rise from just more than 10 percent to over 16 percent with the return of the vacant space to market.

BEA bought the property for $135 million, or about $350 a square foot. The San Jose Redevelopment Agency subsidized the deal by agreeing to sublease 15,000 square-feet of the building's total as part of a larger plan to land downtown's second major technology company headquarters. Adobe Systems Inc., whose headquarters buildings the city also subsidized, was the first.

The Almaden building, a downtown landmark, has been vacant since it was completed in 2002.