Amazon seals Mountain View deal as South Bay office sector perks up
Silicon Valley office market showing signs of returning to life
By George Avalos | Bay Area News Group | PUBLISHED: December 9, 2024 at 12:15 p.m. | UPDATED: December 10, 2024 at 8:38 a.m.
MOUNTAIN VIEW — Amazon has struck a deal to rent a big office building in Mountain View, fresh evidence that the ice-cold office market has begun to thaw in the South Bay.
According to sources with knowledge of the transaction, Amazon has obtained 217,000 square feet of office space through a license agreement provided by WeWork for offices at 401 San Antonio Road in Mountain View. At various times, Facebook and LinkedIn had taken space in the office building through rental agreements.
With this deal, tenants are filling up most of the building and the adjacent 391 San Antonio Rd. office space. Colliers, a commercial real estate firm, is seeking tenants for the two buildings, which were constructed in 2015. Brookfield Properties owns the office buildings.
Seattle-based Amazon plans to occupy the office space in Mountain View in 2025, said a spokesperson for the tech giant. Amazon is constantly evaluating its office footprint based on the needs of its businesses, the company said.
WeWork, a pioneer of the shared workspaces sector, has been working with its client, Amazon, to find spaces for the tech titan in both Silicon Valley and New York City. This connection helped Amazon to land its office space in Mountain View — the Manhattan location is at 330 West 34th St..
“We are pleased to confirm that WeWork is working with Amazon to support its real estate strategy by activating new flexible workspaces in Silicon Valley and Midtown Manhattan, underscoring our commitment to sustainable growth and meeting the diverse needs of our clients where they need us most,” a WeWork spokesperson stated.
The deal in Mountain View also places Amazon in an office building that’s part of The Village at San Antonio — a mixed-use office, retail, restaurant, movie, housing and hotel hub.
“This WeWork location will include flexible, amenity-rich workspaces that aim to enhance productivity, foster collaboration and accommodate unique workstyles,” the WeWork spokesperson said.
The WeWork spokesperson added that large companies are seeking “flexible, future-ready work environments.”
“This location perfectly aligns with WeWork’s focus on flexibility and innovation,” the spokesperson said.
The latest Amazon transaction, the Snowflake agreement to sublease 773,000 square feet in Menlo Park, and a string of deals at a new building in San Jose’s Santana Row neighborhood suggest the office market is beginning to bounce back.
“When you see larger companies take big tranches of office space, smaller companies are going to follow suit,” said Chad Leiker, a first vice president with Kidder Mathews, a commercial real estate firm.
Tech companies have orchestrated waves of layoffs since 2022 with more than 49,000 jobs eliminated in the Bay Area, according to official state government filings. At the same time, the companies also have exited millions of square feet of office spaces, making them available for sublease.
The departures by tech companies and other corporations have also triggered a wave of loan delinquencies and foreclosures of office buildings, with the problems becoming particularly pronounced in San Francisco.
An uneven return to the office by workers, even after the end of COVID-spawned business shutdowns, has added to the forbidding economic landscape. However, a growing number of tech companies have been stating their intentions to mandate that people work from the office for more days a week.
“More and more companies in Silicon Valley will have people working in offices in 2025,” Leiker said. “If that happens, it will bring us closer to where we were in the old days” before the coronavirus outbreak.
Full article: https://www.siliconvalley.com/2024/12/09/amazon-tech-mountain-view-property-lease-economy-jobs-work-real-estate/