It’s been a long cold winter, both literally and figuratively for a lot of businesses in Silicon Valley and across the nation. But the skies are starting to clear. The sun is out – and it seems to be casting its warming rays on commercial real estate, helping to pull that sector – at least in the local market – out of its recent deep freeze.
Large Companies Making Their Move
You want hard evidence? Here are indisputable facts. In March, multiple sources reported that Motorola is taking 240,000 to 250,000 square feet of space at Moffett Towers in Sunnyvale. The first phase of an eventual 23-acre, 1.8 million sq. ft. corporate campus, Moffett Towers consists of three 8-story office buildings totaling more than 900,000 sq. ft. of space. The towers were completed in 2008 in the dead of real estate’s long recessionary winter. The thawing at Moffett Towers is a welcome sign of spring’s return.
And that’s not all. Other large companies such as Plaxo – a web-based address book provider – and HP are nosing around for additional space. The news of Facebook’s expansion to a 1,000,000 sq. ft. campus in Menlo Park made big news a few months ago with its prospects for reinvigorating the employment prospects of those seeking work in the valley. While Facebook may be leaving Palo Alto, VMware is doing the opposite. The company is leasing nearly 1,000,000 sq. ft. of space in Stanford Research Park. And earlier this month, real estate insiders said Dell Computer is moving to new digs in the Great America Parkway area and will hire hundreds of employees to fill what could be more than 200,000 sq. ft. of space.
Where Large Companies Go, Smaller Businesses Will Follow
And here’s even bigger news. We call it the Second Law of Job Multiplication and Business Boosting. Well, okay, it doesn’t really have a name – but it’s as reliable as if it were a real law.
Whenever large corporations start occupying more space, you can count on smaller to mid-sized companies to follow. Why? Because they supply products and services that the larger companies need to do what they do. They also provide a lot of indirect product and services that employees need or want – such as places to eat, shop or spend their leisure hours. All of this has a dramatic compounding effect that drives business growth, fills buildings, raises rents, and even pours tax dollars into the cities’, counties’ and state’s coffers. Who knows, we may yet find our way out of the state budget mess. That’s probably expecting too much, but it’s a nice thought – and business growth and better incomes can’t hurt.
No Time to Waste
If you own or run a smaller to mid-sized business, it’s time to get cracking. Take a look around for the space you might need over the next three to five years. And when you find it, lock it in.
Rents are beginning to rise, but they’re still very reasonable after being near historic lows for so long. And there wasn’t a lot of space built during the Great Recession. So as the big boys start gobbling space, increasing demand is going to drive prices for the dwindling supply up even higher.
You still probably have a little time. But don’t procrastinate, or keep asking for the moon when you negotiate lease rates. You’ll be sorry.
Learn More from Borelli
Borelli Investment Company specializes in marketing quality space for smaller to medium-sized businesses. The company markets a number of projects, but two of note are Fremont Business Park at Christy Street – a three-building complex with great freeway access near the Pacific Commons shopping center; and Club Auto Sport, a busy business community and event center – plus a club for auto enthusiasts – located in North San Jose.
For more information about Fremont Business Park, e-mail Lee Jatta, or call (408) 453-4700 x140. DRE License #01828564. To tour Club Auto Sport and see the business center first-hand, e-mail Anna Mcquillan Rose or call (408) 770-1205. DRE License #01368576