Food Is King In Silicon Valley
Silicon Valley is killing it when it comes to the food scene, with available space getting snapped up faster than it takes you to wait for a table at Burger King. (This town is about bites, not just bytes.)
SRS Real Estate Partners SVP Randol Mackley, who has been in the biz for 38 years in Silicon Valley, tells us food is currently causing extreme competition (better than heart burn) in the Valley. Starbucks and quick-service restaurants are very aggressive on expansion and some of the best rent payers. Randol and SRS SVP Bruce Frazer were recently marketing a 7k SF project in Cupertino (the Biltmore) and 12 legit offers rolled in. Dining spaces are among the first to lease out in mixed-use projects, Randol says.
Randol and Bruce are leasing the retail part of Essex's Solstice apartments in Sunnyvale across from the town center, drawing national and local tenants. Randol did the original Kabul deal in Sunnyvale some 15 years ago, and the Afghan concept also just signed at Solstice. (They also just did a lease there with Beach Hut, which Randol calls an exciting concept.) Restaurants are also driving foot traffic, and in turn more retail, in places like Castro Street in Mountain View and downtown Los Gatos.
Vacancies have gone way down and rents will continue to escalate in Cupertino, Randol predicts. There's a 2% vacancy in Cupertino, with rents achieving a whopping $4.50/SF on some of the product. (Above, the Target Cupertino hit the sales block this year, marketed by CBRE.)