Apple Drops $162M on Bay Area Office Asset

Apple has acquired a 194,827-square-foot office asset at 684 W. Maude Ave. in Sunnyvale, Calif., from Union Investment and Metzler Real Estate Advisors, as first reported by The Mercury News. The property traded for $162.2 million, marking a 26.9 percent discount compared to its 2022 price tag of $222 million.

The office building came online in 2021, about 11 miles north of downtown San Jose, Calif. One year later, LinkedIn signed a 15-year lease agreement at the property. The company paid $323 million for its nearby global headquarters in 2021 and expanded its holdings once more last year through another $75 million deal.

Apple’s footprint in the market is even larger, owning or leasing at least 15 buildings in Sunnyvale, including the Mathilda properties across the street from its newly acquired building. Of the $1.1 billion the company deployed across South Bay last year, $350 million was earmarked for Mathilda Commons and $365 million was set aside for Mathilda Campus.

Meanwhile, other tech giants such as Google are pursuing a different approach. The firm announced its intention to reduce its real estate exposure and followed through with a nine-asset divestment last month. Google sold its properties in Redwood City, Calif., to Farallon Capital Management.

Bay Area’s office deals continue to have the pricing edge

Office assets traded on average for $308 per square foot year-to-date through April across the Bay Area, according to a Yardi Matrix report. The figure was nearly 44 percent higher compared to the national average.

Meanwhile, Apple paid $833 per square foot for its new asset—a staggering figure that more than doubled the market average and nearly quadrupled the U.S. average—once more underscoring the office building trends where a performance chasm grows between newly-built, well-located Class A office assets and older stock approaching obsolescence.