By Meghan Hall
San Jose’s Coleman Highline is still under construction, but Roku Inc.’s growth is forging ahead; after taking an initial 472,000 square feet of space at the development in August of 2018, Roku has signed a lease for an additional 162,577 square feet, according to documents filed with the U.S. Securities and Exchange Commission on Monday.
The lease for the newest office, located at 1143 Coleman Ave., was signed on April 30; the additional space is consolidated in one five-story office building called “Building 1.” The lease will commence in January of 20201 and the assignment agreement provides for an annual base rent of approximately $7.5 million in the first year of the lease term, increasing over time to $9.4 million in the final year of the lease term. Roku has also been entitled to a tenant improvement allowance of approximately $15.3 million during its time occupying the premises. The lease is expected to expire in December 2029, although Roku does have the option to extend the lease one time by five years.
Newmark Knight Frank’s Phil Mahoney and Jeff Rodgers represented Roku in the deal.
At the time of its original lease at Coleman Highline, Roku had announced via SEC filings that it had been searching for a new headquarters for several months. The development is owned by Cupertino, Calif.-based Hunter Storm and designed by Gensler, and upon its completion will total 1.5 million square feet spread across eight buildings. The floor plates average 32,000 square feet in size. 7,500 square feet of on-site retail, and a mix of restaurants, a public market and food trucks are also planned for the development.
The video streaming technology company — whose name means “six” in Japanese — has grown steadily since going public in 2017. Currently, Roku is headquartered in Los Gatos, Calif., where it is currently subleasing 160,000 square feet of space from Netflix.
The newest lease is the second time that Roku has expanded its presence at Coleman Highline. In November of 2018, it added an additional 100,000 square feet of space at the development, according to reporting by the Silicon Valley Business Journal. The Business Journal has also reported that the lease of 1143 Coleman Ave. is where cloud communications company 8×8 was slated to take up space. 8×8 had signed a lease for the Class A office building back in January of 2018, but according to industry reporting had already outgrown the space before ever moving in.
The leases are indicative of how quickly major technology companies are growing in the Bay Area, and how far ahead firms must plan in order to lock down enough real estate for future expansion. While 4.4 million square feet of office space will be delivered throughout Silicon Valley over the next 12 months, 3.2 million square feet is already pre-leased, based on figures from Cushman and Wakefield’s Silicon Valley Office Marketbeat. Currently, Cushman and Wakefield is tracking 11.8 million square feet of active office and R&D tenant requirements, up from 10.5 million square feet at the end of 2018, indicating that upward pressure on the Silicon Valley market will continue.