Office building is booming in Silicon Valley
Silicon Valley witnessed a building boom during 2021 that produced the most office construction in six years amid persistent economic obstacles unleashed by the coronavirus, according to a new report.
The surge in office construction in Santa Clara County last year was sketched out by a report from Cushman & Wakefield Research.
The construction upswing is being driven by heated demand for office space on the part of tech titans — and it appears tech companies won’t soon satisfy their hunger for elbow room.
“Silicon Valley tech and life science companies will build on their lead as the bellwethers of the U.S. economy,” stated the report released by Cushman & Wakefield, a commercial real estate firm. “The active requirements have picked up since the thick of the pandemic when many were placed on hold.”
In 2021, new office construction totaled 3.06 million square feet in Santa Clara County, the Cushman & Wakefield Research report stated. The benchmark measured new office projects that were completed.
The total office construction completed in the South Bay for 2021 was slightly more than double the new office construction that was completed in 2020.
In March 2020, state and local government agencies imposed wide-ranging business shutdowns to combat the coronavirus and numerous companies, including tech firms, instituted efforts for their employees to work from home.
Still, while 2021 ushered in a huge jump in office construction, last year’s total of 3.06 million square feet was far less than the 6 million square feet of office development during 2015, according to Cushman & Wakefield’s research group.
Going back five years and including the 3.06 million square feet in 2021, new office construction totaled 1.5 million in 2020, 2.43 million square feet in 2019, 1.38 million square feet in 2018 and 2.61 million square feet in 2017, Cushman & Wakefield reported.
No new office buildings were completed in downtown San Jose during 2021, the Cushman &Wakefield research determined.
Among the major new construction projects that were completed in 2021, according to Cushman & Wakefield:
— The Yahoo office campus at 1199 Coleman Ave. in north San Jose, totaling 657,000 square feet.
— A Google office campus in north San Jose at the corner of East Brokaw Road and North First Street with addresses that include 90 E. Brokaw Road. This Google-leased project consists of four buildings totaling 611,000 square feet.
— One Santana West, an office building totaling 375,000 square feet at 3155 Olsen Drive in San Jose.
— ServiceNow headquarters campus expansion, phase 2, totaling 268,000 square feet on Lawson Lane in Santa Clara.
Some huge leases during 2021 helped to propel the demand for new office space in Silicon Valley.
In December, Facebook app owner Meta Platforms leased 719,000 square feet of offices in Sunnyvale at a huge tech campus called Moffett Green that’s owned by Tishman Speyer.
In May, Apple leased 700,000 square feet in Sunnyvale’s Pathline Park, a new tech hub.
Experts believe that demand for new office space will remain robust during 2022.
“There are now 8.9 million square feet of active office and research tenant requirements in Silicon Valley,” Cushman & Wakefield stated in its report.