SAN JOSE — The Santa Clara Valley Transportation Authority completed a deal to buy a San Jose office tower for a downtown headquarters where hundreds are expected to work, according to documents filed May 17 with the Santa Clara County Recorder’s Office.

Jessie O’Malley Solis, the VTA’s director of real estate and transit-oriented development, said the South Bay transit agency paid $63.7 million for the tower at 488 South Almaden Blvd., a price that was 60.9% below the property’s assessed value of $163.1 million.

“This was probably a once-in-a-lifetime deal in terms of the purchase price,” Solis said. “Our agency was aware of the state of the office market right now.”

Commercial real estate firm Colliers represented the VTA.

The principal entity in the selling group was an affiliate of EQ Office, which is owned by The Blackstone Group, a New York City-based investment company.

In 2021, the group paid $153.7 million for the office tower, which sits next to the San Jose Convention Center, property records show.

“We are in an unprecedented time for the office market,” said Erik Hayden, founder of San Jose-based real estate firm Urban Catalyst. “Buying this 488 South Almaden site is one of the best fiscal decisions the VTA has ever made.”When VTA moves its workers to the location sometime next year, the transit agency will be poised to provide an additional economic spark for downtown San Jose.

“We will have 500 to 600 daily employees in the South Almaden office building,” Solis said. “That will definitely enliven the area.”

The 17-story building totals 390,000 square feet, according to commercial real estate firm CBRE.

“This deal shows there is no better time to buy an office building if you have cash on hand,” said Bob Staedler, principal executive with land-use consultancy Silicon Valley Synergy. “Getting an empty building off the market is a huge boon to downtown San Jose.”

The VTA’s current head offices are at 3331 North First St., near River Oaks Parkway in north San Jose.

“Our move downtown allows us to free up significant transit-oriented redevelopment land at our River Oaks site,” Solis said.

The VTA’s downtown tower is slated to undergo upgrades ahead of the transit agency’s move in 2026.

During a meeting in February, the VTA Board of Directors authorized staff to enter into a development management agreement with an affiliate of the seller to conduct an upgrade of the tower, according to documents.

Staff was authorized to spend “up to $43.4 million for the buildout and completion of necessary tenant improvements at the future VTA headquarters” at the office building, transit agency documents stated.

“We plan to have our future board meetings on the ground floor of the building,” Solis said.

VTA employees are expected to have access to a gym and a lounge at the new offices.

“People are really excited about the move,” Solis said. “Over Christmas time, during one of the events held for employees, a gingerbread was made of the new headquarters. People are excited about where we are headed.”