Apple to Lease 314,000 SQFT in Milpitas’ McCarthy Creekside R&D Project

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By Vladimir Bosanac

The 237 Corridor, which borders Milpitas and North San Jose has been an active part of the South Bay submarket. Forming the northern boundary of Silicon Valley’s Golden Triangle, the area has become home to several office and industrial projects in the last decade, but it is its industrial prowess that has been paying dividends during 2018 as two significant leases are taking shape and pointing to a healthy industrial market for the city. The latest company to take space there is Apple, which is looking to lease 314,000 square feet of industrial space at the McCarthy Creekside, an 800,000 industrial development under development in the city of Milpitas. This follows a 130,000 square foot expansion that SF Motors, a global intelligent electric vehicle company that aims to accelerate the growth of the EV industry at large, announced earlier in April.

The Silicon Valley Business Journal was the first to report on this transaction.

Situated near Coyote Creek, Route 237 and Interstate 880, McCarthy Creekside is looking to subdivide a 44.17 acre site into six parcels that upon completion will create five single-story industrial buildings that will include warehouse, manufacturing, research and development and office spaces for a total of 804,259 square feet and 49 foot building heights.

The project also features an onsite restaurant building of 18 feet in height with 6,015 square feet and 38 parking spaces. The industrial buildings will include 1,002 parking spaces, and several electric vehicle charing stations are to be added near building entrances later in the construction process.

The project’s owner, Joey McCarthy of McCarthy Ranch based in Los Gatos, had originally envisioned a much larger development for the site back in the 1990s and since that time has been participating in improvements to the vicinity such as upgrades to a connection with the Bay Trail and an initiative to protect the flood plain by widening the floor of Coyote Creek.

The project was designed to bring over 1,000 new jobs to the area. The structures are planned to be LEED Silver certified featuring 100-percent recycled irrigation.

While there is no information available at the moment on the Apple lease, SF Motors did announce that it has chosen this facility to push forward its innovative electric powertrain technology, tapping into Silicon Valley’s proximity to top-tier vendors and Silicon Valley talent. SF Motors currently has R&D facilities in Santa Clara, Ann Arbor, Michigan, and Stuttgart, Germany.

R&D and low-volume manufacturing efforts at the 130,000 square foot facility will be led by Chief Technology Officer Yifan Tang and will center on SF Motors’ proprietary battery, e-powertrain and autonomous driving technologies, according to a company statement. Anticipated activities include testing verification of its technologies, development of manufacturing processes, trial production and low-volume manufacturing. This Silicon Valley facility will additionally focus on intelligent connectivity and user experience feature development.

“Adding to our existing R&D labs, this new facility will conduct extensive design validation testing and low-volume manufacturing necessary to ensure smooth transition to mass production of our batteries and electric powertrains, which are key components of our vehicles,” said SF Motors CTO Yifan Tang in April. “Drawing on our global business model and decades of manufacturing experience, locating this facility near our Silicon Valley headquarters will strategically ensure quality and efficiency as we prepare to bring our intelligent EVs to market.”

SF Motors was the first tenant at McCarthy Creekside. Its facility is planned to become operational in Q4 of 2018.

“We have high standards for the companies we recruit to McCarthy Creekside, and we know that leading-edge companies like SF Motors have high standards in where they choose to locate,” said McCarthy Ranch Principal, Joey McCarthy in a statement. “As SF Motors continues to attract top talent across the EV and tech sectors, the company is clearly putting its people first. This site will not only satisfy its local R&D needs, but also offer employees adjacent retail and outdoor amenities.”

Along with the industrial nature of this development, the site is also in close proximity to Hudson Pacific Properties’ 471,580-square-foot Campus Center asset in Milpitas. In March of 2017, Hudson announced that it would be launching a significant capital plan to reposition this asset as its long term lease with Cisco was expiring during 2018.

The repositioning will include several improvements: entrance and lobby renovations; over 100,000 square feet of contemporary, market-ready office space; master-planned landscaping; and enhanced outdoor recreation areas, including dedicated sporting areas, patios, collaborative seating and direct hiking trail access. NBBJ is the architect of record for the common area improvements with Shlemmer Algaze Associates on point for interior design.

Campus Center consists of three office and R&D buildings with the ability to develop up to approximately one million square feet of additional office, R&D, warehouse or manufacturing space, the company stated. The 65-acre property is in Santa Clara County near McCarthy Ranch and is proximate to a number of leading global technology firms. Campus Center is also close to public transit and the I-880 and 237 Freeway interchange, and is easily accessible to downtown San Jose, San Jose International Airport, Silicon Valley, as well as downtown Oakland and Oakland International Airport.

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