Google Buys 8 Sunnyvale Office Buildings from NetApp for $250M

NetApp, Inc., formerly Network Appliance, Inc., has agreed to sell eight buildings in the Sunnyvale's Moffett Park business district to Google for $250 million, according to documents filed with the SEC. The court filings also reveal sale-leaseback plans as NetApp will continue to lease portions of the property. NetApp announced this month that it would be cutting 376 Sunnyvale jobs by the end of April. The sale of the eight properties is slated to be completed by April 22.

"NetApp has committed to a restructuring and reduction in workforce to streamline its core business and reduce operating costs," NetApp said in a recent filing with the Securities and Exchange Commission.

The eight buildings totaling 569,000 square feet include:
— 1299 Orleans Drive, 46,000 square feet
— 1277 Orleans Drive, 42,624 square feet
— 1260 Crossman Avenue, 95,464 square feet
— 1240 Crossman Avenue, 125,648 square feet
— 549 Baltic Way, 110,160 square feet
— 641 Baltic Way, 88,320 square feet
— 611 Baltic Way, 43,472 square feet
— 633 Caribbean Drive, 43,372 square feet

Potentially, 3,000 Google employees could work in the eight Sunnvale buildings, which is one of the high-priority expansion zones for Google. "This is a lot of space they are taking in Sunnyvale, and Google's goal appears to be to acquire as much as they can in this area," said David Vanoncini, managing partner with the San Jose office of commercial realty firm Kidder Mathews.

"People like to talk about the impact of startups, but really it's the big companies in Silicon Valley that are growing and creating the most jobs," added Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. "You will always have some churn among the second- and third-tier tech companies, but the big companies are the ones that dominate this area. [...] The big players are the ones that will really determine how the region grows and prospers. And because of companies like Google, Apple, Facebook, LinkedIn, eBay, Intel and Oracle, the recovery and expansion in Silicon Valley is in good hands."

For more news and information visit Blumberg Partners.

Twitter Adds to Sunnyvale Space

Twitter, the San Francisco micro-blogging social network, announced this week that it was expanding its office space with the lease of an additional 10,000 square feet at Sunnyvale Business Park, at 400 West California Ave. The company first established its presence at Sunnyvale in May of this year with the lease of 8,000 square feet of space, along with the commitment from property owner Principal Real Estate Investors to construct a 107,000-square-foot office building next to the existing building for additional Twitter space.

Dave Sandlin, a Colliers International senior vice president who represents Twitter's Sunnyvale property, said some San Francisco tech companies are realizing they need to have a presence further south. After all, while the city might be the hot talent market right now, the greater San Jose metro area also carries some advantages. "If you look at the housing situation in San Francisco, trying to put all your workers up there is very difficult, " said Sandlin.

The emphasis on San Francisco signifies how Silicon Valley, an area extending south from just below San Francisco to San Jose, California, no longer has a grip on technology companies, as reported by a New York Times article this month. About 18 months ago, tech companies started moving or expanding here to be closer to their employees. According to reports, Twitter is looking to add 320,000 square feet to its footprint in San Francisco, bringing its total to about 600,000 square feet.

For more news and information visit Blumberg Capital Partners.

Kilroy Realty Developing $315M LinkedIn Campus

Kilroy Realty Corporation (KRC) announced this month that it had acquired a 12-acre site in Sunnyvale, California to develop, own and manage a $315 million campus for LinkedIn Corporation, operator of the world's largest professional network on the internet. Under a 12-year lease agreement, KRC will develop a state-of-the-art 587,000 square-foot office project for LinkedIn, with three mid-rise Class A office buildings and a parking structure designed and pre-certified to meet LEED Silver requirements. Sherman Chan and Bob Steinbock, both senior vice presidents at CBRE, acted as investment brokers in the transaction. Attorneys with the law firm Allen Matkins represented both Kilroy Realty and the seller, according to a CoStar report.

"We're delighted to partner with LinkedIn in the creation of a new LEED-certified office facility," said John Kilroy, Jr., KRC's President and Chief Executive Officer. "This is another opportunity for us to create significant value for our shareholders through the development of the highest quality real estate at superior returns."

Eli Khouri, KRC's Chief Investment Officer, added: "This transaction is the fourth of its kind in 2012 where KRC has agreed to develop, from the ground up, new state-of-the-art buildings for leading technology companies in the Bay Area. These types of opportunities have arisen from KRC's strategy of acquiring superior locations in the best submarkets where we can offer superb space to the region's premier tenants."

Sunnyvale, with a Class A total vacancy rate of less than 5%, is a highly sought after location for tenants seeking to cluster around major technology firms, including Apple, Yahoo!, AMD and now, LinkedIn. Average asking rents for Class A office space in Sunnyvale stood at $4.01 per square foot as of the third quarter of this year, according to Cassidy Turley. LinkedIn already is in roughly 76,000 square feet on the site at 599 Mathilda Ave., and that building is expected to remain, according to a San Jose Business Journal article.

For more news and information visit Blumberg Capital Partners.

Apple Picks Up More Than 1 Million SF in Sunnyvale

Technology giant Apple has made moves in Sunnyvale, CA, picking up more than 1 million square feet of new office space that could accommodate as many as 5,000 employees. As the company continues to outgrow its space in Cupertino, Apple continues to lease new space and has, so far, agreed to lease a total of 1.2 million square feet in Sunnyvale according to city records and real estate brokers involved in the deals.

"It's a remarkable growth spurt for Apple," said Jim Beeger, senior vice president with Colliers International, a commercial realty brokerage, in a San Jose Mercury News article. "This is a 30-year-old company undergoing the type of explosive expansion that you see with a three-year-old startup."

"Cupertino is pretty much filled up because of Apple's growth, much like Mountain View is pretty much filled up because of Google," said Phil Mahoney, an executive vice president with realty firm Cornish & Carey Newmark Knight Frank. "Both Google and Apple need more room. Both of them decided to find space in Sunnyvale."

"As I look at my iPad and check my iPhone, it really strikes me how much Apple has been able to achieve and how they have remade themselves," said Reed Payne, an executive vice president with Kidder Mathews, a commercial realty firm. "The future is not only bright for Apple, but the future bodes well for all of Silicon Valley."

For more news and information visit Blumberg Capital Partners.