MILPITAS >> Analog Devices sold a five-building office and research campus in the South Bay to a veteran real estate firm in a deal that points to a nosedive in values for Bay Area office buildings.

An affiliate of Goodman Group paid nearly $40.4 million for the complex in Milpitas in an all-cash deal, according to documents filed on Monday with the Santa Clara County recorder’s office.

The Milpitas campus, near the interchange of Tasman Drive and Interstate 880, totals 319,800 square feet, according to commercial real estate firm Cushman & Wakefield. The campus was empty at the time of the transaction.

The deal marks the second time in recent weeks that Analog Devices has sold a large office and research property in the South Bay. In February, it sold a north San Jose office building at 3550 North First St. for $18.5 million. The deal also hints at a decline in values.

The $40.4 million that the Goodman Group affiliate paid was nearly 47% below the estimated value of the five buildings and land beneath them as of January 2024, as calculated by the Santa Clara County assessor’s office.

Goodman Group could use the discount to offer low rent levels to entice tenants to the site. And since each building occupies a separate parcel, the buildings could be sold off individually to companies that want to own a building where they operate, or to real estate investors.

The real value, however, might reside in the 17.3 acres of land beneath the five buildings.

“The campus offers the opportunity to redevelop the site to an industrial project, significantly increasing the density on the site,” Cushman & Wakefield said. “There is a lack of large, industrial redevelopment sites throughout Silicon Valley. Demand from tenants for new, state-of-the-art industrial buildings remains high.”