In what might be a first for a major Silicon Valley employer, Stanford University has pre-leased an entire apartment complex for its workers, part of an effort to provide more living options for faculty and staff amid a deepening housing shortage in Silicon Valley.
“This lease is one of a host of ways we can address what has become a real concern, particularly as we compete to recruit the best faculty from other parts of the country, where they experience very different real estate markets,” Jean Snider, managing director of real estate for Stanford, said in a statement.
Stanford has agreed to lease the 167-unit Colonnade apartments about 3.5 miles from campus at 4750 El Camino Real in Los Altos across the street from the San Antonio Shopping Center. Sares Regis Group of Northern California and its financial partner, Pritzker Realty Group, are currently under construction on the project, which includes about 12,000-square-feet of ground floor retail.
The lease is an example of the lengths some organizations are going to ensure their workers have a place to live. Santa Clara County apartment rents jumped 9.5 percent in 2014, according to RealFacts, to a monthly average of $2,977. Despite thousands of new units coming online, occupancy remains around 95 percent — and simply landing an apartment at any price can be a challenge, especially in high-demand areas such as Palo Alto.
The Colonnade apartments — 100 one-bedrooms and 67 two-bedrooms — are expected to be offered “within the market range,” a Stanford spokeswoman told me. In other words, the Stanford deal is all about providing supply.
“We want to be able to say to someone that we’re recruiting from another part of the housing market that’s very different from ours, that we have great, wonderful, comfortable, proximate options for housing,” spokeswoman Lisa Lapin told me.
Major companies have long leased blocks of units to house interns and traveling workers for defined periods of time, but the Colonnade deal is expected to serve as long-term housing for Stanford employees, officials said in the university statement. Terms of the deal were not disclosed. The complex will include 17 below-market units, which was required of the developer when the project was approved.
Access to housing is a growing concern as Silicon Valley tech companies seek to recruit large numbers of workers during the current boom. But similar arrangements are hard to find. Google Inc. does lease some apartments for interns and traveling employees, but not for workers to live in long-term. Facebook Inc. was widely reported to be building its own apartment complex in Menlo Park in 2013, but Facebook is actually only funding the affordable component of that development as part of its obligation to the city to contribute to low-income housing.
Stanford has a long history of helping workers obtain housing, though normally it develops and owns projects on its own. Currently, Stanford is under construction on 180 for-sale units for Stanford faculty in the Stanford Research Park on the 1400-1600 blocks of upper California Avenue. Those units, which will be offered at less than market rate, are being built by Regis Homes Bay Area, a company affiliated with Sares Regis Group. They are some of the first housing built in the Research Park, long known as the region’s premier office complex.
In the early 2000s, Stanford built Stanford West, a university-owned apartment complex with more than 600 units.
“That’s all rental to Stanford affiliates,” Lapin said. “The waiting list for Stanford West has grown significantly recently.”
The Sares Regis deal is the first time Stanford has leased an entire project from a private developer, she said.
In a statement, Jan Thomson, director of faculty staff housing for Stanford, said the Colonnade units will be available to faculty, staff and potentially academic researchers. The complex’s location suited Stanford because it’s located within quick bike and bus-trip distance from campus, and the university has a limit on how many car trips its employees can take.
The school already operates a shuttle between campus and the San Antonio Shopping Center and will increase that service.
“Los Altos is already home to many Stanford professors and staff members, who enjoy what they consider a very desirable place to live,” Thomson said in the statement.
The project is expected to be complete this spring. Amenities will include a fitness center and spa, rooftop deck, club room and bike parking.