Apple buys big Cupertino office building as real estate footprint grows
Declining value for empty property hints at feeble post COVID office market
By George Avalos | gavalos@bayareanewsgroup.com | Bay Area News Group Published: June 30, 2023 at 5:30 a.m. | Updated June 30, 2023 at 5:35 a.m.
CUPERTINO — Apple has grabbed a big Cupertino office building in a purchase that points to the tech titan’s expansion mode — a real estate deal that also hints at a feeble office market in the wake of the coronavirus.
The iPhone maker bought a four-story office building at 10200 South De Anza Boulevard, a property that’s about two miles from the company’s Cupertino world headquarters at Apple Park.
Apple paid $70 million for the vacant office property, according to documents filed on June 29 with the Santa Clara County Recorder’s Office. That’s a jaw-dropping plunge of nearly 35% in the building’s value since the property’s prior sale in 2019.
The tech company bought the building through an all-cash deal, the county public records show.
The building totals roughly 161,000 square feet and occupies about 1.3 acres near the corner of South De Anza Boulevard and Cali Avenue, a few blocks from Stevens Creek Boulevard, according to property databases.
The floors are roomy, ranging in size from 36,000 square feet to 45,000 square feet, which allows for plenty of flexibility for workers in the 10200 South De Anza building.
Rubicon Point Partners, a veteran San Francisco-based real estate investment firm that sold the office building to Apple, bought the property in 2019, real estate records show.
The 2019 purchase and this week’s acquisition by Apple appear to demonstrate in microcosm the rise and fall of the Bay Area office market.
Seagate Technology sold the office building to Rubicon Point Partners for $107.5 million in June 2019. At the time of the purchase, the building seemed like a sure thing, considering its location near digital behemoths that include Apple and Amazon’s Lab 126.
Yet within nine months, the unforeseen happened with the outbreak of the coronavirus, a debacle that devastated the global economy.
The effects of the coronavirus prompted state and local government officials to impose wide-ranging business shutdowns starting in March 2020 to combat the spread of the deadly bug.
The government-mandated business lockdowns emptied out many office buildings and prompted Corporate America to find ways to work at a distance, using a broad range of technologies.
Tech companies in particular embraced the remote work model, raising uncertainties over how much office space they would need in the future.
Despite its choice location, the 10200 South De Anza office building — much like countless other office properties nationwide — suffered declining values in the wake of the coronavirus outbreak.
The Cupertino office building’s value was $109.7 million in July 2020, which certainly mirrored the price Rubicon paid about a year earlier.
But as the coronavirus raged, the office building’s value tumbled to $92.8 million in July 2021 before rallying a tiny bit to a value of $94.6 million in mid-2022, county Assessor’s Office documents show.
The $70 million that Apple paid represents a 34.9% nosedive compared to the building’s value when it was previously bought four years ago.
But the deal also is a reminder that tech companies — despite a dreary drumbeat of headlines about tech layoffs and job cuts in the crucial industry — still seek to pave pathways to future expansion.
The 10200 De Anza office building could potentially accommodate 650 to 800 workers based on typical ratios for office space for each employee.
Full article by George Avalos: https://www.mercurynews.com/2023/06/30/apple-cupertino-real-estate-office-buy-tech-economy-build-jobs-iphone/