Squeezed south: Red-hot Peninsula real estate sends companies to 408
“The only thing I can recall that looks anything like this is actually Tokyo or Moscow, which are very expensive per square foot, relative to the value you get,” Chief Financial Officer Scott Davidson said.
So Hortonworks decided to move the 350-employee company south, tripling its footprint in Santa Clara. The company, which just landed a $100 million funding round in March at a reported $1 billion-plus valuation, expects the new space to hold the company for a couple of years as it expands.
Hortonworks isn’t alone. In the past few weeks, fast-growing tech firms located in Mountain View and Palo Alto have signed leases to absorb nearly 300,000 square feet in cities to the south as prices rise and options for sizable blocks of space dwindle along the Peninsula.
Many are landing in Santa Clara, including two Mountain View startups: Ooyala, which leased 65,000 square feet, and Jasper Technologies, which took 73,000 square feet. Smaller transactions from Barnes & Noble’s Nook division (coming out of Palo Alto) and Big Switch Networks (from Mountain View) underscore the momentum.
It’s too early to call this a tidal wave, and the region constantly sees an ebb and flow of tenants across municipalities. But industry observers say the southern migration — from cities located in the 650 area code of mid-Peninsula to those in the South Bay’s 408 — appears to be real, and is picking up speed.
“I’m surprised it hadn’t accelerated yet,” said Dave Sandlin, a broker with Colliers International.