In the past year-and-a-half Apple has bought 24 companies with boss Tim Cook admitting his company is “on the prowl” for potential acquisitions. Now the world’s second-largest information technology company has turned its attention grabbing chunks of prime real estate.
As work on Apple Campus 2 — situated one mile east of its existing Cupertino headquarters — gets underway, the Mac and iPhone is leading the biggest leasing surge in California’s Silicon Valley since the dot-com boom.
Apple, which has vaulted past Exxon Mobil to become the world’s most valuable company, has burst out of its longtime base in Cupertino to lease more than one-million square feet in neighbouring Sunnyvale — helping to cut the city’s office vacancy rate by more than half.
Commercial and office occupancy in the region rose by 2.7 million sq ft last year, its highest since 2000, while the majority of brokers expect rents to continue rising by as much as 11 per cent this year.
“This is the greatest recovery I’ve ever seen in Silicon Valley,” said Michael Covarrubias, chief executive officer of San Francisco-based TMG Partners and a 35-year commercial real estate veteran.
According to his sources, Apple is about to sign the lease on roughly 250,000sq ft of office and research and development space in Sunnyvale, one of the major cities that make up San Francisco Bay Area’s Silicon Valley.
It is already known to have leased around 200,000sq ft in several office blocks at nearby Sunnyvale Crossing, as well as a 290,000sq ft complex of seven buildings that once made up the campus of Maxim Integrated Products. Apple is already occupying a building not far away in San Gabriel Drive and is expected to lease 64,800sq ft at an office complex on Macara Avenue, just around the corner from Benecia Avenue where it already leases several buildings.
Apple’s deals in the first three months of this year also involve a rare move into San Jose, the state’s third largest city, and a location the company had previous ignored. Structural work on a 187,000sq ft, six-storey oval building at on the Santa Clara-Cupertino border has been completed with Apple slated as the sole occupant and demanding even more space. The developer, Peery-Arrillaga, has now applied for permission to add three more floors and 54,900sq ft of office space — a sure sign that Apple’s need for space has outstripped even its construction programme.
Many of these properties are being leased until its $5bn (£3bn) four-story, circular spaceship Apple Campus 2 development is completed sometime after 2016 and its scattering of staff can return to its 2.8 million sq ft of offices and labs.
Characteristically Apple spokesman Steve Dowling declined to comment on the company’s property deals. Apple, however, is known to be Silicon Valley’s top property buyer over the last two years and outstripping even search engine and Android operating system owner Google.
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