Zighelboim tells GlobeSt.com the over-market rent is due to tenants signing leases in 2000. Westcore has four years left for rents to rise and narrow the gap. So far, things are heading in the right direction, with annual rent growth on a 15% clip in the recent past and now, apparently, more rapidly.

When Colliers began marketing the building for sale, Zighelboim says the going class A market rent in Milpitas, where vacancy is at or below 5%, was approximately $1.25, triple net. Now, one week beyond the sale, he says the top of the range is closer to $1.50 per sf, a multi-year high to match the multi-year low vacancy rate.

As a magnet for high-technology firms, "this market is typically pretty volatile," Zighelboim says. "It was hit pretty hard by the tech wreck."

Earlier this month a decidedly less occupied building on California Circle changed hands. Making its entry into the Silicon Valley Market, Equastone paid $11 million for a vacant single-story building with approximately 100,000 sf (net rentable) built out for office and R&D use.

The building sits on 6.34 acres at 1331 California Circle, which is located between Interstates 880 and 680 in the northeast corner of Santa Clara County. The building will receive a full interior and exterior cosmetic remodel, including a new glass lobby, while being marketed for lease or resale. The asking lease rate at the time of sale was $1.35 per sf per month, triple net.

In explaining the acquisition, Equastone acquisitions director Chris Stai told GlobeSt.com that neighboring markets have upzoned their commercial land, which will result in the redevelopment of a lot of underutilized class B properties (i.e. concrete tilt-up industrial buildings built out for office use) into higher density three- and four-story office buildings, multifamily residential projects and retail centers.

"It's going to displace a lot of tenants that prefer the product type and lower occupancy costs while also decreasing the supply, which will put continued upward pressure on rents as the Valley's job market continues to improve" Stai says. "And since there is substantial room for market rents to grow before rents can justify new construction, we believe existing properties will only become more valuable."