San Francisco commercial occupancy has reached an all-time low in the past few years amid the pandemic, setting a new reality for Silicon Valley.
Major tech players are looking to sell off their massive corporate complexes in the area, or reconsider new developments.
Intel Corporation — the cloud computing, data center and semiconductor chip maker — is aiming to sell its 505,000-square-foot office at 101-141 Innovation Drive, the Post can confirm.
While a listing price is not publicly available, the building is valued at $193 million, according to the real deal.
“As a hybrid-first company, we are continuing to assess and optimize our space utilization to create more livable workspaces for our employees when they are on-site, while also achieving cost reductions,” Addy Burr, with Intel Corporate Communications, told the Post in a statement.
“As such, we will consolidate Intel’s San Jose Innovation Campus with our Santa Clara Mission campus.”
Consisting of four buildings, Intel is offering leasebacks of approximately 12 to 24 months in exchange.
Meanwhile, Analog Devices — specializing in data conversion and signal processing — is seeking a buyer for its 320,000-square-foot campus in Milpitas, located 15 minutes from the Intel Building.
According to TRD, the company is also not publicly disclosing the asking price – however, it is valued at $32 million.
Composed of five separate buildings, they were built in the 1980s.
The Post has contacted Analog Devices for comment.
While vacancy rates have contributed to a cleaning up of Silicon Valley, the recent incidents with Silicon Valley Bank have shaken the industry.
About 21% of SVB’s commercial loans were for office properties.
Investors are still assessing the bank’s takeover by federal regulators, which left its $2.6 billion commercial loan portfolio in a brief limbo.
luxury condo prices The heart of downtown San Francisco has also declined, as drug abuse and crime have eluded control – and many techies continue to work remotely.
For example, the median sales price for two-bedroom apartments has fallen by nearly 20% since 2021, while sales prices in surrounding areas have fallen by only 7%.
Meanwhile, Google recently announced that it, too, was reconsidering the timeline for its Downtown West project in San Jose that was in the works.
The plan is now expected to take years and could set a precedent for other downtown plans, where business closures from the pandemic spurred remote working trends.
Last month, Google cut more than 6% of its workforceWhich is equal to 12,000 jobs.
The company joins other tech giants, including microsoft and Amazon, which handed out pink slips during a major downturn within the tech sector.
Overall, the office vacancy rate increased from 18.6% to 19% quarter-over-quarter, and there was 17.2 million square feet of vacant space available in the market.
According to a report by Cushman & Wakefield, the end of 2022 marked the 12th consecutive quarter in which the overall vacancy rate has increased, a 9% increase since the first quarter of 2020.