Silicon Valley has come a long way since the late 1990s. Back then, high-technology startups that were registering little or no profit were still snapping up rental office space in anticipation of growth that never happened. Their actions helped usher in the dot-com bust of 2001.
Today, tech juggernauts Apple, LinkedIn, Facebook and Google are making money and growing. And they’re acquiring land and buildings this time, favoring ownership over long-term leases.
That’s the underpinning of the boost in property tax assessment values now experienced in the Silicon Valley, according to the latest annual tally that was released by the Santa Clara County Assessor’s Office this summer.
“The major factors for the growth are definitely new construction and changes of ownership of residential, commercial and multifamily properties,” said Assistant County Assessor Marie Fuentes. In addition, Fuentes said, properties that have not changed ownership in years still get a 2 percent bump in their assessed value under California Proposition 13.
Santa Clara County posted a total net assessment roll of $419.2 billion in 2016–17, up 7.9 percent from the prior year, according to the county assessor’s most recent report. Alameda County jumped to $254 billion, a 6.9 rise, while San Francisco County increased to $209 billion, up 8.8 percent. And San Mateo County hit $190.9 billion, up 7.6 percent.
The county’s assessment roll report covers the period from July 1, 2016 to June 30, 2017.
With tech giant Google expressing interest in establishing office space in downtown San Jose and Apple’s new campus nearing completion on 175 acres in Cupertino, assessments could continue to grow.
However, neither of these particular new developments will be fully assessed until they are completed and occupied. “You probably won’t see that reflected on the assessment roll for another year or couple of years,” Fuentes said of any potential impact of a new Google complex on assessments.
The assessment roll figure includes the value of land and buildings—secured property—as well as the value of computers, equipment and other items that are designated as unsecured property, Fuentes said. The assessor’s office expects to have preliminary results about how the next fiscal year is shaping up in early 2018, she said.
Commercial real estate blog CommercialCafe recently compiled a list of the top 50 in property taxes in Silicon Valley, incorporating data from PropertyShark and public records. In addition to technology companies, commercial real estate firms have a major presence on CommercialCafe’s Top 50 Property Taxes in Silicon Valley list.
Of the largest 50 tax-paying properties in Silicon Valley, here are the top five companies and their property tax assessments, as reported by CommercialCafe.
- Apple Park, Cupertino, $21.5 million.
Apple’s campus cost $5 billion to build. Construction work is still ongoing, although many employees did make the move in April to the 2.8 million-square-foot ‘spaceship’ building designed by Foster + Partners. That four-story, circular building situated on a 175-acre site will replace Apple’s current headquarters at 1 Infinite Loop, which is also located in Cupertino. Apple has two other properties on the top 50 list. The consumer tech giant’s headquarters at 1 Infinite Loop currently pays the eighth-highest property taxes in Silicon Valley–$10.3 million per year, CommercialCafe said. The consumer tech giant’s Apple Newark Data Center commands $4.7 million in yearly property taxes.
- Genentech, South San Francisco, $20.3 million.
Biotech company Genentech became a subsidiary of Switzerland-based healthcare giant Roche in 2009. Since then, the massive campus has also served as the headquarters for Roche’s U.S. pharmaceutical operations, containing 47 buildings that house advanced research centers, manufacturing facilities and various business functions, according to the Genentech website.
- Tesla, Fremont, $19.7 million.
Electric car company Tesla’s 370-acre, 5.3 million-square-foot factory is located at 45500 Fremont Blvd. in a building that previously housed General Motors and Toyota’s New United Motor Manufacturing (NUMMI) plant. Tesla acquired the facility in 2010 and started rolling off Model S vehicles in 2012, according to the company web site. The city of Fremont has already approved an expansion of the factory that will bring it to nearly 10 million square feet.
- Gilead Sciences, San Mateo, $16.3 million.
Biotechnology company Gilead Sciences paid $123 million to acquire its campus in Foster City in 2003 from a subsidiary of Equity Office Properties Trust. Back then, Gilead at first occupied just half of the campus’ 16 buildings, but has now expanded. In 2015, the company bought 12 more acres near its headquarters, where it plans to build an additional 800,000 square feet of space.
- Googleplex headquarters, Mountain View, $14.5 million.
The online technology company Google paid $319 million to acquire the property at 1600 Amphitheatre Parkway from Goldman Sachs Asset Management in June 2006–the equivalent of $630 per square foot, according to data from data firm Yardi Matrix, a sister firm of CommercialCafe. Google, owned by Alphabet, has amassed a formidable portfolio of real estate assets around Silicon Valley. Other Google-owned properties on CommercialCafe’s list include Sunnyvale (No. 6 on the list), the Google Pacific Shores Center in Redwood City ( No. 16), the Google Building RLS1 in Mountain View ( No. 28), the Google Bayhill Office Center in San Bruno ( No. 32) and the Google Palo Alto Cluster in Palo Alto ( No. 40).