By Meghan Hall
Another Silicon Valley commercial deal has come to light nearly a month later, falling in line with several other transactions that closed in mid-March. Invisalign orthodontics maker Align Technology recently closed on a deal that would position it well for future expansion. The firm recently purchased 3 W. Plumeria Drive in North San Jose for $21.346 million, or about $268 per square foot, according to public property documents. The seller was LBA Realty, who has one of its corporate offices in San Francisco.
LBA Realty’s website states that the property totals 79,521 square feet. The property is the former headquarters of A10 Networks, who vacated the property after subleasing 116,000 square feet from Marvell Semiconductor Inc. at 2300 Orchard Parkway. The building is also not far from where Align Technology is currently headquartered, at 2820 Orchard Parkway.
The Silicon Valley office market had a sluggish start to 2020, according to CBRE in its first quarter office report. However, while leasing was down, several larger transactions throughout the first several months of the year show there is still momentum in the market moving forward. Hines and Oaktree Capital purchased the Santa Clara Towers project for $195 million, while Northridge Capital acquired the Santa Clara headquarters of ServiceNow on Lawson Lane, paying $276.3 million for the property. More recently at the beginning of April, Google purchased the former home of Texas Instruments in Sunnyvale for $28.5 million, or $568 per square foot.
In North San Jose where Align’s newest buy is located, vacancy sat at 9.7 percent at the end of the first quarter, and asking rates came in at $3.99 per square foot.
These transactions, combined with how the nature of COVID-19 and ensuing economic slowdown have progressed, could mean that economy recovery could also be quick, says CBRE. The brokerage firm predicts that economic recovery could begin as soon as the third quarter, and stimulus money could drive year-end growth that could set the market up for a stronger 2021.