By Meghan Hall
After closing a deal for three of Cisco’s North San Jose office buildings in December of 2019, Google has purchased a fourth building from the multinational technology firm, solidifying a deal that was already in the works at the end of last year. Google paid about $41.2 million in cash, for part of Cisco’s current headquarters, located at 225 W. Tasman Drive and known as Cisco Building K.
The Mercury News was the first to report the transaction. According to public property documents, the building is three stories and totals 140,210 square feet.
For the remaining three buildings, just adjacent to 225 W. Tasman Drive, Google paid about $123 million. The four buildings were constructed in 1996 and total more than 550,000 square feet on 25-acres. In all, the campus could accommodate some 3,000 employees.
The buildings are not only part of Cisco’s current headquarters, but are also just up W. Tasman Drive from Samsung Electronics, who occupies more than one million square feet at its headquarters on a 9-acre site. Cypress Semiconductor is also nearby, and the property is located just a few minutes south of the Alviso neighborhood of San Jose, where many technology firms have set up shop along North First Street.
North San Jose has become a hub for tech firms like Google, who want to be close to Silicon Valley but are looking for space to expand. North San Jose itself has some 8.1 million square feet of inventory and a direct vacancy rate of around 22 percent, according to a 2020 first quarter report released by brokerage firm JLL. Some 611,000 square feet of office space is also under construction as well. However, says the finalization of Google’s acquisition follows a quarter in which both leasing activity and major purchases have been limited. While the submarket is better poised to withstand a slowdown thanks to the presence of firms like Google and Cisco, JLL maintains that some disruption to the commercial real estate market moving forward is inevitable.