4 Big Issues Shaking Up SV Real Estate
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Between Apple, LinkedIn and Facebook, the square footage game in Silicon Valley is rapidly changing. Here's what you need to know.
1. Multifamily is Surging
Growing tech companies need workforce housing, and Irvine Co has big plans to provide just that. Some 600 more units could land within steps from Apple's new spaceship campus, with Irvine's planned expansion of its Hamptons apartment complex, which would grow the community from 342 units to 942. Planning and design would take two years, and if green-lighted by the city, construction would start in 2017. Cupertino mayor Rod Sinks says by adding 600 units there, as opposed to other places in town, the city is really trying to provide housing near jobs.
2. Politics Matters
LinkedIn won a big fight last month over Silicon Valley neighbor Google and real estate developers for building rights in Mountain View’s North Bayshore district. The city council gave LinkedIn about 1.4M SF, the bulk of some 2.2M SF of available commercial square footage for the area. Google came away with 515k SF, which is enough for one piece of its futuristic four-part campus expansion. “To have one building—it’s a significant blow,” David Radcliffe, VP of real estate and workplace services for Google, told the council before the vote. Google's still trying to get more space.
3. Tech Buying Spree
This year Facebook ate up a big piece of SV, purchasing a 21-building, 56-acre industrial park next to its growing HQ. Prologis has owned and managed the property, named Menlo Science & Technology Park, since 1998. Prologis will provide ongoing management services on behalf of Facebook. Here's Prologis CEO Hamid Moghadam (right), cracking up at Green Street Advisors' Mike Kirby's joke at a Bisnow event.
4. Space Constraints
Following up on its plans announced in January, Jay Paul Co closed on one of two major land buys for its massive office project coming to Sunnyvale. The developer threw down $70.5M for the 16.6-acre parcel at 1190 Enterprise Way, according to title documents cited in the Silicon Valley Business Journal. The second piece to close will be a 30-acre Lockheed-owned parcel that's expected to trade by the end of 2015. The parcels house five Lockheed-occupied buildings, and in the aging buildings' place will go state-of-the-art office towers.