Sunnyvale Set to Steal Tenants from Neighboring Submarkets; Legacy Pounces on Development Opportunity
- Oct 10, 2012
The improving office market in Silicon Valley is making its effects known, as landlords and developers scramble to get as much space as possible while the spike lasts. Yet while the area is set to continue to generate interest due to the presence of giants such as Facebook and Google, there is a sense of urgency in the actions of companies like Legacy Partners.
Legacy just recently announced that it is set to expand one of its Sunnyvale properties by 107,000 square feet. The company intends to develop a brand new office/research and development venue at the Sunnyvale Business Park, a property that already includes nine buildings.
Set to be built at 600 W. California Ave., the new building will most likely be a single-tenant property, built over three stories and offering Class A office and R&D space. The entire complex currently totals 516,760 square feet and is located in Sunnyvale’s Peery Park, a submarket that has seen growing interest from businesses that can’t or prefer not to pay the Mountain View and Palo Alto premiums. The tenth building of the Sunnyvale Business Park is being marketed by Colliers International and has a completion date set for Q3 2013.
According to data from CBRE, Silicon Valley’s vacancy numbers are just above the 10 percent mark, while net absorption is currently at about -150,000 square feet. In terms of rent rates, Sunnyvale has mid-range prices, trailing the Valley’s average rate for Class B offices, while only Cupertino, Palo Alto and Mountain View/Los Altos exceed the city’s Class A office rates.
Chart courtesy of CBRE Commercial Real Estate Services at cbre.com