HPE divested part of its office campus at Innovation Way in Sunnyvale to an affiliate of Bluerock, a New York-based alternative asset firm. The affiliate purchased the property for $330.7 million and inked a long-term leaseback with the tenant through 2047. This deal marks a significant transaction in the region’s commercial real estate market.
The complex at 1133 Innovation Way near Moffett Field includes an eight-story, Class-A office building totaling 319,000 square feet. It houses Juniper Networks, which Hewlett Packard Enterprises acquired last year for $14 billion. HPE still occupies and owns an adjacent building at 1137 Innovation Way. According to the Silicon Valley Business Journal, the sale was part of HPE’s management strategy for its portfolio of real property assets.
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Bluerock funded the acquisition through a $310 million loan from a group led by Wilmington Trust. The deal structure allows the tenant, Juniper Networks, to remain in the space under a long-term lease.
Selling the building at 1133 was part of HPE’s management strategy for its portfolio of real property assets, an HPE spokesperson told the Silicon Valley Business Journal. The company has been consolidating its footprint across the Bay Area. HPE in 2018 relocated its main Silicon Valley offices to north San Jose from Palo Alto, where it was founded in a one-car garage in 1939. HPE in 2020 announced it was relocating its global headquarters to the Houston suburb of Spring and opened a 440,000-square-foot, 60-acre corporate campus there in 2022.
The purchase by Bluerock is the latest Bay Area office acquisition in recent months to exceed $1,000 per square foot. This price point signals growing investor confidence in office properties anchored by investment-grade and premier tenants. In mid-July, Shorenstein purchased 550 Allerton St., a 77,000-square-foot, six-story property in downtown Redwood City, for $78 million. The building was 81 percent leased and anchored by international law firm Gunderson Dettmer, which relocated from Silicon Valley to the newly built midrise tower in 2018.
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While high-profile deals signal strength in specific markets, broader trends in the region show mixed results. Office vacancy continues to pressure many office landlords across the Peninsula and South Bay area. Office vacancy in all Peninsula submarkets was 23.8 percent in the second quarter of 2026, according to Kidder Mathews. Vacancy in Redwood City was substantially higher at 37.4 percent, followed by South San Francisco at 34.2 percent.
With a limited development pipeline of 712,000 square feet, vacancy is expected to tighten as artificial intelligence, medtech, fintech, and professional services companies seek new space in key Peninsula submarkets, Kidder Mathews researchers said. Office vacancy in Silicon Valley in Q2 was much lower at 16 percent — down 170 basis points year-over-year — with 1.1 million square feet of new product in the development pipeline, Kidder’s research group said.