By Meghan Hall
Newbury, England-based software and information technology company Micro Focus is leaving Sunnyvale behind and will move into a 113,000 square foot office at 4555 Great America Parkway in Santa Clara, Calif. Micro Focus will take the third and fourth floors of one of two buildings part of the Towers at Great America complex, becoming one of a host of other companies searching for office space at more reasonable rates.
The transaction was first reported by the Silicon Valley Business Journal.
Although Sunnyvale has become a market of interest for major tech companies such as Amazon, Apple and Facebook, among others, the Santa Clara market has been able to attract some interest from companies, mainly because vacancy has been one of the highest in that submarket of Silicon Valley.
Amazon will be taking over Micro Focus’ current lease at 1140 and 1160 Enterprise Way in Jay Paul’s Moffett Towers — an expansion that totals 385,000 square feet. As other major tech players such as Apple — whose 777,170 square foot built-to-suit campus in Sunnyvale came on line during the first half of 2018 — have expanded their footprint in the area, it has pushed vacancy rates down and rental rates up.
Santa Clara had the highest commercial office space availability rates at the end of the second quarter of 2018, according to Colliers International’s 2018 Q2 Silicon Valley Report. Santa Clara had an office availability rate of 18.8 percent, while neighboring Sunnyvale had an availability rate of just 3.1 percent. The vacancy rate in Santa Clara was a tad higher, at 21.2 percent, according to a Cushman & Wakefield report also released after the second quarter of 2018.
According to the same Cushman & Wakefield report, throughout the valley, Class A overall rents have increased by 40 percent since 2012. Sunnyvale commands one of the highest average asking rates for office space in Northern California. The average asking rate in Sunnyvale is roughly $6.50 per square foot, which ranks third behind Palo Alto and Mountain View, where the average rates are just over $7.00 per square foot. Santa Clara’s average rates are much lower, with office space going for roughly $4.50 per square foot.
Micro Focus’ new office is located just north of U.S. Route 101. The office park is also five minutes from a retail center anchored by Walmart and an AMC Theater, and is just down the street from the Santa Clara Convention Center.