Silicon Valley Office Rents Hit Record High
USA – Data from property consultancy Colliers shows that average office rents in Silicon Valley have reached an all-time high thanks to robust leasing activity, particularly by tech titans, reported Mercury News on Friday (7 January, SGT).
During the last quarter of 2021, tech giants that completed major lease or real estate acquisition include Meta, Google, Apple, Amazon, Tesla, and LinkedIn.
For instance, Facebook’s parent firm Meta leased a 719,000 sq ft workspace in a north Sunnyvale campus near the intersection of Caribbean Drive and Crossman Avenue. Tesla agreed to occupy 325,000 sq ft at 1501 Page Mill Road in Palo Alto.
Google invested US$73.5 million for a 2-storey office building spanning 60,000 sq ft that stands on a 4.3-acre plot at 1665 Charleston Road in Mountain View. The search giant is also building 2 large new Mountain View campuses nearby.
Amazon forked out US$123 million for a 29-acre Milpitas development with some office buildings.
Similarly, LinkedIn paid US$122.8 million in cash for 2 old office buildings in Sunnyvale, with plans to redevelop the site into a huge tech campus. The company also rented an adjacent modern office block along 684 W. Maude Avenue measuring 194,600 sq ft
The strong activity is a contrast from for most of 2020 and 2021, when Silicon Valley’s office market languished due to COVID-related restrictions.
“We’re seeing a big change from what was going on before. A lot of big tech companies came off the sidelines and made deals in the fourth quarter,” said Lena Tutko, Research Director at Colliers.
Consequently, average office rents in Silicon Valley reached an all-time high to US$5.42 psf in Q4 2021 compared to US$5.17 during the same period in 2020.