By Meghan Hall
One of the Bay Area’s largest regional developers, The Sobrato Organization, has purchased a prime site in downtown Mountain View for $28 million. Acting through an affiliate, SI 69, The Sobrato Organization acquired the property from Wells Fargo Bank National Association in a transaction that closed on September 25th, according to reporting done by The Mercury News.
The property, located at 590 Castro Street, includes a Wells Fargo Bank branch and large parking lot, which some experts are saying is well poised for redevelopment, according to The Mercury News. The property is adjacent to The Sobrato Organization’s headquarters, located at 599 Castro Street. Also within walking distance is the Mountain View Public Library, Yoga Belly, Scratch, Mantra Indian and Kirin, some of Mountain View’s many eateries.
Sobrato is one of the largest developers and owners of commercial property in Silicon Valley; currently, the firm owns 75 office and research and development projects totaling 7.5 million square feet in Silicon Valley. Many of Sobrato’s projects are home to major employers in the region, including Amazon-University Square, a 214,000 square foot building completed in 2017 and located in East Palo Alto, Netflix’s 160,000 square foot headquarters in Los Gatos and Apple Computer’s World Headquarters in Cupertino, which completed in 1993, totals 856,000 square feet spread across six, four-story buildings.
To date, Sobrato also owns two other properties in Mountain View: the Palo Alto Medical Foundation building off of El Camino Real, which totals 106,000 square feet, and one of Google’s offices, located at 1255 Pear Avenue. The building is 156,000 square feet and was completed in 2014.
The Mountain View and greater Silicon Valley commercial real estate market is expected to continue to do well, driven primarily by tech growth within the submarket, according to a second quarter report released by Colliers International. Silicon Valley still holds 45.6 percent of the region’s tech employment, meaning that office space will continue to lease at a premium. In the second quarter of 2019, gross office absorption was recorded at 2.7 million square feet, with positive net absorption at 862,471 square feet. Office availability rates in Mountain View are also expected to remain low; current availability sits at 8.1 percent; Palo Alto, San Jose and Santa Clara have vacancy rates of 12.2 percent, 11.7 percent and 18 percent, respectively. And despite an anticipated 9.9 million square feet of office space under construction, the outlook for the Silicon Valley office market remains strong, states Colliers.