Techs and Developers Jockey for Dwindling Supply of Large Silicon Valley Development Parcels

Silicon Valley, Transwestern Commercial Services, CREW SV, BNP Paribas Real Estate, Devencore

Silicon-Valley

By David Goll

Some of the few remaining open or under-developed tracts of land in Silicon Valley are being snapped up or readied for buyers and eventual development.

[contextly_sidebar id=”CFA4yWPowQcBYvD3JAd5rMzajgoktUSP”]Tech companies large and mid-sized, manufacturers and land developers are all potential buyers and tenants for two sizable chunks of largely open land—one in the heart of Silicon Valley and another along one of its major north-south transportation corridors.

In addition, Apple’s plans to develop an 86-acre site in North San Jose took another step toward reality on Jan. 13 as the San Jose Planning Commission quickly approved an agreement between the tech giant and the city. Next and final stop is the City Council on Jan. 26.

The various parcels assembled by Apple through earlier purchases are just north of busy Highway 101, across from Mineta San Jose International Airport. The site is bordered by Guadalupe Parkway, Orchard Parkway and Component Drive. The agreement approved by planning commissioners entitles Apple to develop up to 4.1 million square feet of industrial, office, manufacturing and R&D space over the next 15 years. This comes at the same time Apple is building its new headquarters in neighboring Cupertino—the circular 2.8-million-square-foot, $5 billion building known as the “spaceship” structure.

“Thank you for coming to San Jose,” said Planning Commissioner Ed Abelite to Apple’s representatives. “As a largely bedroom community, we need the jobs that you will bring to our city.”

Meanwhile, another Silicon Valley household-name, Yahoo, is shopping a 48.6-acre parcel of land near Levi’s Stadium in Santa Clara, according to local real estate industry insiders. They say the vacant site that is a “very unique property located at the center of Silicon Valley” could draw high-tech tenants other than behemoths Apple and Google, or developers looking to do master-plan projects.

Despite Yahoo’s recent financial problems, the company is “not desperate to sell” the land, according to the source, who added it could sell for well north of $300 million.

And a 41-acre piece of land west of Interstate 880 in Fremont, that was once part of the 150-acre Cisco Field stadium site for the Oakland A’s that never materialized, has been sold for just over $57 million to Illinois-based Conor Commercial Real Estate LLC by Integral Communities of Newport Beach. Fremont officials are banking on the site being used to expand the city’s burgeoning manufacturing sector. Integral, a residential developer, also never built on the site.

“We are very hopeful the future use will support our manufacturing-based economy,” said Christina Briggs, Fremont’s deputy director of economic development and assistant to the city manager. “That could be manufacturing or logistics and include office, based on the types of activities happening in our business community.”

Nearly 2 million square feet of speculative Class A industrial space has been constructed in the city in recent years, mostly in the Innovation District of south Fremont, Briggs said. Tesla Motors has been manufacturing its electric automobiles in the former NUMMI plant east of I-880 since 2010, and large industrial facilities in the area have recently been leased by Apple and Living Spaces Furniture of La Mirada.

Briggs said the city has created three master plans for different zones in south Fremont, including in the developing area surrounding the Warm Springs BART station, scheduled to open sometime later this year. Developments by Lennar Corp., which include both residential and commercial uses, and Toll Brothers, featuring mainly residential, have already been approved by Fremont officials.

To the south, the Yahoo parcel in Santa Clara’s burgeoning Bayshore district sandwiched between busy Highways 101 and 237 has “great potential for development,” said Nick Lazzarini, managing director in the San Jose office of Cushman & Wakefield. “Yahoo figured the market is hot,” he said.

He said commercial space in the district—which features both Levi’s Stadium and California’s Great America amusement park—is being transformed from mostly R&D use to office, residential and retail.

“A big tenant, a large high-tech company, could be interested in the Santa Clara site, especially since it’s near Levi’s Stadium and light rail,” Lazzarini said. “That would offer some built-in savings for them. But I expect it will be a developer that takes the site, like The Irvine Company.”

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