By Meghan Hall
Rambus Incorporated, an American technology company currently based in Sunnyvale, Calif., has signed a new lease in North San Jose, which will become the new location for the company’s headquarters. According to an SEC filing dating to July 8th, Rambus will take 90,000 square feet at 4453 North First Street in San Jose. The building is currently owned by Los Gatos, Calif.-based South Bay Development Company.
The filing states that the space will serve as Rambus’ headquarters, and it will include engineering, marketing and administrative functions. The lease is expected to begin during the summer of 2020 and has a term of 128 months from the commencement date. Rambus has also been granted a one-time option to extend the lease for an additional 60 months, or five years.
The starting rent of the lease is $3.26 per square foot on a triple net basis, with the rent reaching $4.28 by the 11th year of the lease. Rambus’ current lease, located at 1050 Enterprise Way, is expected to expire on June 30, 2020. The building, part of the Moffett Towers complex is currently owned by Jay Paul Company and was developed in 2007.
The new property will introduce Rambus to one of the region’s hottest submarkets when it comes to growing companies looking for space. Just off of State Route 237 and near a shopping center anchored by Target, Panera and Chic-Fil-A, numerous other technology companies call North San Jose home. Bloom Energy, Harmonic and D2solar are just a few of Rambus’ future neighbors.
Tech companies ASML and Zscaler are also slated to move into the neighborhoods based on leases the two firms each signed leases earlier this year. ASML is expected to move into its new digs, located in two buildings at 10 W. Tasman Dr. and 125 Rio Robles Dr. at the end of 2020, filling up 265,000 square feet of space. In May, cloud-based information security company Zscaler agreed to lease 172,000 square feet from Boise, Idaho-based Micron Technology at 120 Holger Way.
San Jose had the largest positive absorption in Silicon Valley with 70,762 square feet, according to Kidder Mathews’ 2019 First Quarter Market Report. Average rents continue to inch up as companies compete for space, with the average rental rate in San Jose sitting at about $3.90 full service. However, San Jose remains relatively affordable compared to tighter Silicon Valley markets such as Mountain View, where the average rental rate is $6.58 full service, or Palo Alto, where the rental rate is $8.10, giving growing companies ample opportunity to jump into the market. According to Kidder Mathews, growth in San Jose and Silicon Valley is likely to continue, with 80 percent of construction inventory preleased, indicating strong demand.