Tishman Speyer Buys Silicon Valley Campus for $365M

The seller, cloud services firm NetApp, will move its headquarters to a hybrid work-oriented office.

Former NetApp campus in Sunnyvale. Image courtesy of Tishman Speyer

Tishman Speyer has acquired the Sunnyvale, Calif., headquarters campus of NetApp, as the Fortune 500 cloud services company prepares to decamp to a smaller, more forward-looking location in San Jose, Calif. The real estate development and investment giant snapped up the four-building, Class A property in the Moffett Park submarket for $365 million.

NetApp was the seller and will relocate later this year after a short lease-back period. Built in 2012, the huge property at 1395 Crossman Ave. spans a total of 700,000 square feet of office space. NetApp will move to 700 Santana Row, about 7 miles southeast of its current home.

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The new global headquarters consists of an eight-story, 303,000-square-foot building owned by Federal Realty Investment Trust in the mixed-use Santana Row district of West San Jose. NetApp will spend the rest of the year further customizing and settling into the offices, which it says are more optimized for hybrid work.

The tech firm’s current location sits just south of the San Francisco Bay and includes two parking structures, along with outdoor recreational space. Tishman Speyer said in a prepared statement that it plans to re-lease the property to one or more tenants after capital improvements.

Growing in a tech hub

Manhattan-based Tishman Speyer, which has a global real estate portfolio worth $113 billion, noted that the office space is still in excellent condition. Amenities include a gym with basketball court, lockers and showers, an outdoor volleyball court, an executive briefing center and a full-service cafeteria. Tishman Speyer plans to retain most of the property’s amenities while adding its own wellness, lifestyle and corporate services for tenants under the company’s Zo brand.

700 Santana Row. Image courtesy of NetApp

A Savills team of Joe Brady, Michael Drew, Peter Hamann and John Brady represented NetApp in the sale and the relocation lease. Newmark’s Phil Mahoney, Jon Mackey, and Mike Saign will handle leasing at the campus on behalf of Tishman Speyer.

The property has been on the market since January, when The Mercury News reported that Savills had circulated a flyer offering. The sale marks NetApp’s second disposition on the block. In August 2019, Google bought a roughly 16-acre parcel, representing half of NetApp’s then 30-acre site, for $95.6 million, the newspaper reported at the time.

Tishman Speyer’s President & CEO Rob Speyer commented in a statement that demand for high-quality office space around Moffett Park is “very strong.” The area has become a favorite for Silicon Valley firms in recent years. In addition to Google, which has spent more than $1 billion buying up properties in the area, Facebook and Amazon have preleased Jay Paul Cos.’s 1.8 million-square-foot Moffett Towers II.

The acquisition by Tishman Speyer boosts the company’s portfolio in Silicon Valley, which already includes Bayside Towers in Foster City, 400 Castro St. in Mountain View and 222 Second in San Francisco, which is leased to LinkedIn. In 2018, the developer joined forces with Major League Baseball team the San Francisco Giants to build Mission Rock, a 28-acre mixed-use project in the team’s home city.

Going hybrid

NetApp said that its new location in San Jose will serve the company’s ongoing transition to a hybrid work model that is better geared toward employee needs. The state-of-the-art office will feature a cascading, interconnecting staircase, an indoor fireplace lounge, water walls on each floor and a full-service kitchen and café on the sixth floor that will be connected to a large outdoor terrace.

“The workplace focuses on the employee experience and promotes an innovative, open and fun environment,” a NetApp representative noted to Commercial Property Executive.

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