The Silicon Valley tech boom has triggered robust office space development. This in turn has been critical in buttressing the other forms of development currently underway in the region. Over a five-year stretch ending in 2015, the Silicon Valley area added 350,000 jobs and 220,000 residents. However, some theorize that a costly and vastly undersupplied housing supply in conjunction with a decline in technology funding may signal a cooling period more generally for the commercial office sector in Silicon Valley. A recent reading of the Bloomberg U.S. Startups Barometer – an index that considers capital raised and number of deals, first financings, and successful acquisitions or initial public offerings—indicates a historical high in investment, yet has fallen 21 percent since November 2015.
The big names have big plans.
Nonetheless, several large-scale office projects are currently moving through the pipeline and companies like Facebook, Google, and Apple continue to expand their sizeable office footprint in the region. One developer with the greenlight from these tech behemoths is Jay Paul Company, with projects in Sunnyvale including Central + Wolfe, an 800,000 square foot office project under construction has been pre-leased by Apple in its entirety since 2015 and Moffett Place, bringing 1,890,000 square feet of office space to a 10-acre parcel is pre-leased by Google.
The Valley expands.
Other notable examples: Menlo Gateway, a 16-acre mixed-use development currently under by Bohannon Development Co that will include a 200,000 square foot, eight-story office building, an 11-story, luxury Marriott Autograph Collection hotel, outdoor event facilities, and a state-of-the-art Bay Club fitness facility in its first phase; Coleman Highline by Hunter/Storm LLC, a 364,000 square foot office project in North San Jose; and Midpoint@237 by Lincoln Property Co. and Gemdale Co, approved for 415,000 square feet of office space over 21.5 acres in North San Jose. The office component of Midpoint@237 will be located next to 600,000 sf of manufacturing space, which is currently under construction by Trammell Crow. Both portions of the project are being built on spec.
Confidence in construction.
Silicon Valley is booming again, bringing more jobs to the area. While some feel there could be a slowing down of office space development, bigger, more well-known companies feel quite confident in moving ahead with their expansion plans.