SAN JOSE — An office building in San Jose was purchased for a price that points to an unrelenting nosedive in values for commercial properties in the Bay Area.

The 110,700-square-foot building at 2125 O’Nel Dr., next to PayPal’s headquarters, was bought for $15 million by an affiliate controlled by BH Properties, according to documents filed on May 9 with the Santa Clara County Recorder’s Office.

As of January 2024, the property’s assessed value was $34.1 million.

It was sold by an affiliate of Embarcadero Capital Partners, which renovated the property ahead of the sale.

In 2018, the Embarcadero Capital affiliate paid about $24.1 million for the two-story building. According to information from commercial real estate firm Colliers, Embarcadero was seeking to sell the building for $23 million in December 2024.

The declining property values could cause property tax revenue to an array of public agencies to dwindle. If real estate values turn soft in a jurisdiction, that could squeeze a crucial revenue stream for cities, counties, regional agencies and school districts.

The north San Jose deal offers fresh evidence of a plunge in value for office buildings throughout the Bay Area on the heels of slumping office rents and soaring vacancy levels.

Some office market woes have morphed into a rising tide of defaults as lenders move to foreclose on delinquent loans.