To get a sense at the state of office demand in mid-2024, take a look at this sale in California's Silicon Valley near a campus of iPhone maker Apple.

Global real estate investor Hines offloaded a flexible office property for $100.8 million in one of the highest price office transactions for the region since the onset of the COVID-19 pandemic. Yet the price is more than 46% of what Hines paid for the the seven-building Oakmead West complex in Sunnyvale roughly four years ago.

The sale, while signaling demand from buyers, still marks another discounted deal for the region that's seen depressed valuations at a time of ongoing remote work and higher interest rates. It also reflects what some real estate brokers around the country have said is some sales movement, but at lower values as some buyers decide that prices aren't going higher anytime soon.

San Francisco investor Tidewater Capital paid $234 per square foot for the flex campus, according to documents filed with Santa Clara County, less than six months after Hines began marketing the property. The seven properties at 920, 935, 940, 945 and 960 Stewart Drive; and at 490 and 510 DeGuigne Drive are part of a 431,000-square-foot campus bought by Hines in 2019 for $188 million from New York-based Deutsche Asset & Wealth Management.

That pre-pandemic price is a far cry from the valuations of today, as higher interest rates and economic uncertainty make investors cautious and deals difficult to price, according to CoStar Market Analytics. The average office sale in greater San Jose, where Sunnyvale is located, worked out to about $566 per square foot in the first quarter, off more than 8% from the year prior.

On a total price basis, the sale of Oakmead West is the largest for Sunnyvale since 2022, according to CoStar data. It's also Sunnyvale's first flex office sale larger than 20,000 square feet so far this year.

But these types of deals, higher than in recent years but still lower than pre-pandemic levels, aren’t just limited to Silicon Valley. In major cities around the country, investors that have sat on the sidelines as they tried to gauge office values are now dipping their toes back in.

In Los Angeles, a pair of private investors have said they acquired two creative offices in separate deals totaling $75 million from LaSalle Investment Management in a sign of such momentum. Newmark's Kevin Shannon, who helped broker the recent Playa Vista deals, said the transactions are a "reflection" of increased capital in the office market, with certain properties coming online for "a comparatively very attractive basis."

The largest tenant at the property is Trimble, a software company that takes up nearly 139,000 square feet of office space in two of the buildings. Two other buildings are vacant, according to CoStar data, while the remaining three range from 55% to 74% occupied with tenants including Medtronic and Analog Bits. The complex is mostly used for research purposes.

The campus is located less than a half-mile from Apple’s Central & Wolfe campus, an 777,000-square-foot property developed by San Francisco-based Landbank to resemble Apple’s headquarters in nearby Cupertino; that base spans 2.8 million square feet.

Sunnyvale is in the heart of Silicon Valley — near the bases of Apple in Cupertino, Meta in Menlo Park and Google in Mountain View — and has a large tenant base that includes some of the biggest names in tech. In the past few years, the market has attracted the largest amount of new construction in greater San Jose. This includes several build-to-suit projects for the likes of Apple, LinkedIn and Fortinet.

The market’s vacancy rate is 9.1%, about twice as much as it was in 2019. Silicon Valley’s overall vacancy rate has remained more stable with a current level of 7.3% compared to 6.3% five years ago.

Sunnyvale’s flex market is mostly occupied by technology companies for research, development and manufacturing purposes.

“The market for [flex] space has seen some weakness in the current downturn, with vacancy on the rise. But the longer-term outlook is positive,” said Nigel Hughes, senior director of market analytics at CoStar Group. “While investment sales activity is down, average sales prices are only a little below their historic average, which suggests investors still have interest in acquiring flex buildings here."