CUPERTINO – Apple’s mega-deal to buy several large office buildings in Cupertino contradicts the narrative that the tech industry is fleeing Silicon Valley and helping Apple build its presence in the Bay Area.
The tech titan paid $ 450 million to reclaim five office buildings Apple leased in Cupertino, according to documents filed Sept. 24 with the Santa Clara County Recorder’s Office and as reported last week by this press organization.
The Cupertino buildings purchased by Apple are all located near the Interstate 280 interchange and North De Anza Boulevard. The addresses are 10500 N. De Anza Blvd., 20400 Mariana Ave .; and 20605, 20665 and 20705 Valley Green Drive, according to county public documents.
“When it comes to companies staying or fleeing this region, the story of Silicon Valley’s demise has been greatly exaggerated,” said Dave Sandlin, executive vice president of Colliers, a commercial real estate company.
In some cases, it may be wise for some companies to move some of their business outside of Silicon Valley. But in most cases, it makes more sense for tech companies to stay in Silicon Valley.
“If you’re looking for top tech talent, high growth, and cutting edge technology, you are in Silicon Valley,” Sandlin said.
HPE and Oracle are among the few companies that have revealed plans to move their operations or headquarters to Texas. But these high-profile departures increasingly appear to be the exception and have not undermined the Silicon Valley economy.
“Companies say they’re moving, but they really haven’t moved everything,” Sandlin said. “They keep the same number of employees here as before.”
Apple, in the recent transaction, purchased the buildings through a trio of deals at varying prices, according to county records:
– 10500, boulevard N. De Anza, 206 million dollars. The building totals 211,000 square feet.
– 20605, 20665 and 20700 Valley Green Drive, $ 138.6 million. Together, the three buildings total 142,000 square feet.
– 20400 avenue Mariani, $ 105.4 million. The building totals 105,000 square feet.
Apple, based in Cupertino, paid cash for the buildings, according to county documents.
“The deal with Apple is a smart move to use the money to buy buildings they will need for the long term,” said Bob Staedler, managing director of Silicon Valley Synergy, a land use planning consultancy.
Purchases of properties by the iPhone maker are a reminder that in many cases the company would rather own rather than lease its local offices.
“Apple has a huge history in Cupertino,” Sandlin said. “When office buildings are for sale in Cupertino, there is an 80% chance that Apple will take what becomes available.”
The sellers in the deals were subsidiaries controlled by legendary developer Carl Berg, according to public records.
The price Apple paid for the five buildings ranks the transaction as one of the largest real estate purchases, by value, so far in 2021 in South Bay.
Among the biggest real estate purchases known to date in 2021 in Santa Clara County:
– In March, Brookfield Properties paid $ 630 million for two large office buildings in Mountain View that were leased to Facebook, a building that includes a 10-screen movie complex and a parking structure.
– In July, KKR paid $ 535 million for a three-building complex north of San Jose and a parking structure.
Apple was also involved, as a tenant, in a huge office lease. Apple in May leased 701,000 square feet at the Pathline Park technology campus in Sunnyvale, enough office space for 3,000 workers.
And in addition to Apple’s deals this year, tech giants such as Google, Facebook, Adobe, and Amazon, through combinations of real estate purchases, leases, and development projects, have launched or have begun to prepare for major expansions in Silicon Valley, even in the face of uncertainties related to the coronavirus.
“Sooner or later, the story of Silicon Valley’s demise could become true if house prices continue to rise and government actions are negative for tech companies,” Sandlin said.
That forbidding day has not yet arrived, however, in Sandlin’s opinion.
“Right now, Silicon Valley is such a successful place for business,” Sandlin said. “Tech companies always like to steal employees from other companies. You can’t do that in Ohio or most places across the country. There aren’t many places other than Silicon Valley where technical engineers say they can work for multiple companies within five miles of each other.
