Your Commercial Real Estate Source in the San Francisco Bay Area
We reported back in May that Google was at the forefront of many companies soaking up Class A Office space in and around Palo Alto and Mountain View. They inked a deal with the City of Mountain View to lease approximately 9.5 acres near Shoreline Blvd. This coincided with other players like Facebook, Hewlett-Packard, and Microsoft who were all vying for the cream of the proverbial Class A crop in Silicon Valley.
Within the past week we heard news that Google had purchased Motorola to shore up its mobile phone division and its treasure chest of patents and put it on a level playing field with players such as Apple, who is also aggressively seeking space in the area and had a Q&A session with the City of Palo Alto not too long ago. So it comes as no surprise when we learn that Google has leased another 715,000 sq feet of Class A space at the Technology Corners campus in Sunnyvale. We are trying to get a rate, but you can rest assured that Google payed top dollar for the opportunity to plug into Jay Paul’s four-building property.
This is Google’s first foray into the Sunnyvale market and shows how companies are starting to venture outside the traditional Palo Alto/Mountain View arena into surrounding markets due to the lack of large Class A space. Many in the industry are seeing a rippling effect in the office sector moving both north and south through the Peninsula. In fact we have already seen nearly 4 million sq feet of net absorption in 2011 alone. This fact should start to put pressure on neighboring cities such as Sunnyvale, Menlo Park, Redwood City, and Santa Clara. It could even have ramifications as far north as South San Francisco as biotech and R&D space is squeezed out of Silicon Valley.
We’ll keep you in the loop.