General Motors Considers Massive Silicon Valley Downsizing
General Motors is considering downsizing its Bay Area real estate portfolio in a move that would shrink its nearly 1M SF footprint across multiple cities to just 400K SF on a single Silicon Valley campus, the San Francisco Business Times reported.
Sunnyvale’s six-building Tech Corners office complex is an early favorite to serve as GM's hub after downsizing other locations.
A GM lease could be finalized within about 60 days, but no terms have been released. Such a large-scale consolidation would bring together GM’s offices in San Francisco, Mountain View, Palo Alto and elsewhere in the Bay Area.
GM’s interest is driven by the desire for efficiency, according to the Business Times. The company has struggled to backfill portions of its San Francisco space, and several of its leases are set to expire between 2026 and 2028. A single campus would simplify operations and reduce overhead. If the company proceeds, a relocation and build-out could take several years.
The Silicon Valley office market has heated up as vacancy has fallen for four consecutive quarters. There is no new supply under construction, and competition for Class-A space has intensified as artificial intelligence, software and hardware firms continue to expand.
AI tenants now control more than 6M SF in the region, contributing to one of the tightest submarkets in the Bay Area, where vacancy sits at 16.6%, compared to San Francisco's 34.4%.
Sunnyvale accounted for nearly half of net absorption in the third quarter, with much of that concentrated in leases at CityLine, according to CBRE. Databricks signed a 305K SF lease there earlier this year.
GM’s plan fits the emerging pattern of tenants chasing amenity-rich, campus-style environments that have become the hallmark of the tech sector. GM is reportedly evaluating similar settings, designed to support hybrid work and attract technical talent in a highly competitive labor pool.
AI and tech companies have gobbled up much of Silicon Valley’s premium office space, leading the charge in the flight to quality. Apple picked up a four-building campus for $365M this summer, in addition to a three-building Cupertino campus for $167M.
Nvidia bought three Santa Clara office buildings for $254M in May, followed by a fourth nearby for $83M. OpenAI is in talks to take over a 450K SF campus in Mountain View.
GM joins a list of the largest employers in the U.S. that are reconfiguring their space needs as return-to-work mandates pile up. Others include AT&T, Amazon and Wells Fargo.
