By Meghan Hall
Cloud-based information security company Zscaler is expanding and has agreed to lease 172,000 square feet of space from Boise, Idaho-based Micron Technology at 120 Holger Way in North San Jose. First reported by the Silicon Valley Business Journal, Zscaler is expected to take five of seven floors of the building, part of a greater 600,400 square foot Class A complex leased by Micron last year.
The ground floor of the 120 Holger Way building will be a shared space with amenities such as a coffee bar and a gym, while the last remaining floor in the building will be used by Micron. The building totals 218, 349 square feet, while the campuses’ other two buildings, located at 110 and 130 Holger Way, are 124,767 and 218,349 square feet, respectively. The three building complex is owned by Lane Partners, who acquired the property for $225.5 million in 2017.
The lease is part of a move by Zscaler to consolidate its headquarters from two offices to one in San Jose. The offices are located at 110 Rose Orchard Way, where Zscaler currently leases 41,286 square feet. The second office, located at 6201 America Center Drive in San Jose’s San Alviso district, includes 14,483 square feet of space.
The Business Journal also reported that the lease is also part of Micron’s strategy for growth in the region, as Micron plans to expand into its campus gradually. The subleases will allow Micron some flexibility in growth for both the short and long term.
North San Jose has become a hub for growing companies looking for large blocks of space, particularly for tech and cloud-based software companies such as Zscaler. Netherlands-based ASML recently signed a 265,000 square foot lease at three Divco West Buildings in North San Jose. Activity in North San Jose is also not limited to leasing; Google purchased two office buildings at 4300 and 4400 N. First Ave. in November for $154.5 million in November 2018. More recently, Embarcadero Capital Partners purchased a 108,446 square foot asset at 2125 O’Nel for $24.15 million, or about $223 per square foot.
According to Cushman and Wakefield’s First Quarter Office Marketbeat for 2019, demand for office space throughout North San Jose and Silicon Valley will remain strong. Currently, 4.4 million square feet of new product is under construction, and 3.2 million square feet has been pre-leased. 2018, said Cushman and Wakefield, had some of the strongest leasing activity on record, and that activity is expected to continue throughout 2019.