Interest in Silicon Valley sublease space, especially of the plug-and-play variety with lots of amenities may be experiencing a true revival. In a sign that things are starting to move again across the Bay Area’s office properties, Mountain View-based Pure Storage is taking over the sublease of roughly 330,000 square feet of space in two Santa Clara Square buildings located at 2555 and 2565 Augustine Drive. The current tenant, Analog Devices, will be vacating the entire building at 2555 and the bottom half of 2565 to make room for its new occupants. The new lease will run through October of 2030, according to sources with knowledge of the leasing details.
Irvine Company’s Santa Clara Square is major mixed-use development next to US Highway 101 and along Bowers Avenue and Scott Boulevard in Santa Clara. The two buildings where Pure Storage will be based are each six-story, 222,529 square foot Class-A office buildings, featuring approximately 38,000 square-foot open floor plates. In addition, the buildings have two cafes with adjacent dining areas, two fitness centers, and expansive outdoor amenity courtyards with collaboration and seating areas. The property also features a garage with 1,469 spaces.
Pure Storage, an enterprise-level data and information storage company, was represented in its search by JLL, while the landlord, Irvine Company worked with Cushman & Wakefield.
This lease is a significant deal for Silicon Valley, and it comes on the heels of Apple leasing 382,000 square feet at Jay Paul’s Mathilda Commons property in Sunnyvale. While big tech has been the primary driver of leasing activity in Silicon Valley during 2021, according to a recent, first quarter of 2022 Office Insight report by JLL, the pace of its activity is likely to slow down while the delivery of pre-leased space is completed. JLL saw the first quarter register negative absorption across the entire Silicon Valley region during the first quarter of the year, but it anticipates an uptick in activity driven by companies’ desire to reopen and welcome workers back into the offices.
JLL sees around 5.7 million square feet of space under construction with vacancy in the first quarter hitting 15.2 percent. Sublease vacancy is still above 2 million square feet of space with average sublease asking rent hovering around $5.75 and direct asking rent around $5.63.