Visa Research Moves Out of Palo Alto, Places Entire 64,000 SQFT Building on Sublease Market

Visa, Palo Alto, Silicon Valley, Compstak, American Realty Advisors, The Minkoff Group, Oakland, Mission Rock, Berkeley, brick, 385 Sherman Avenue
Photo courtesy of brick; Copyright Jasper Sanidad

By Vladimir Bosanac

Visa Research, an arm of the world’s largest credit card processing firm, is closing its offices in Palo Alto and placing the entire building it occupied at 385 Sherman Avenue on the sublease market. The 64,000-square-foot building, owned by Los Angeles-based American Realty Advisors, still has Visa as a tenant until 2028, according to Compstak. Still, its availability will certainly test the leasing market in one of the most important Silicon Valley submarkets.

The announcement was made by Visa in early January, according to the company’s spokesperson Andy Gerlt, vice president of global communications. While the company did not have anything specific to say about the Palo Alto property decision, the plans have been in the works since 2019. “This is part of our previously announced Bay Area real estate strategy. …we will [be closing] our Palo Alto office as we move into our new headquarters at Mission Rock in early 2024,” said Gerlt in an e-mail to The Registry.

The building has only had Visa as a tenant so far. According to previous reporting by The Registry, the property was completed in 2016 by The Minkoff Group, an Oakland-based developer associated with Daniel M. Minkoff. In April 2018, Minkoff sold the property to American Realty Advisors in a deal worth $138 million, or just over $2,156 per square foot. Berkeley-based brick was the architect on the project.

Visa announced in July of 2016 that it was opening a new office and taking up the entire space at the location in Palo Alto. This community is home to some of the greatest breakthroughs in technology, from the first personal computer to the latest in self-driving, connected cars and automated homes, and Visa is excited to have a footprint in the middle of it all and to contribute to the spirit of ideas with the next evolution of payment technologies, according to a statement from the company. Visa’s data, research, network processing and loyalty & offers teams are located in the space.

“Everything we do begins and ends with our technology and talent,” said Al Kelly, then-Visa CEO when the announcement was made. “It’s the only way we can continue to lead in the payments industry, which is moving at lightning speed. The new Palo Alto office is part of Visa’s effort to attract and retain the best people and to foster collaboration with the organizations based in Silicon Valley.”

Over time, San Francisco gained some of the shine that a Silicon Valley address had previously. Prior to the COVID-19 pandemic, the city attracted a younger talent pool, and companies such as Visa were looking for ways to attract this cohort and decided to lease significant space in the City. In 2019, Visa announced its plans to lease a new, 300,000-square-foot, 13-story building in the vibrant Mission Rock neighborhood of San Francisco, which will serve as the company’s new global headquarters once completed, according to a statement by the company. This state-of-the-art facility will be exclusively Visa’s, and will feature a rooftop deck and terraces, as well as ample common spaces to support the company’s goals around community-building, partnership and working more effectively, the company stated.

Across the Bay Area, companies have been shedding space as they reassess their needs for corporate offices in the future. Companies such as Chime, Oracle, Twitter, Salesforce, Netflix, Okta, Airbnb and others have placed millions of square feet of office space on the sublease market, according to reporting by The Registry. This continues to be a challenge for the industry reeling from the impact of the global pandemic on the commercial real estate market.

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