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August 17, 2017

Apple leases big Santa Clara buildings, launches construction

The Mercury News

George Avalos

SANTA CLARA - Apple has leased some big buildings in Santa Clara and has begun a significant reconstruction of their interiors.

The technology titan wouldn't disclose the purpose of the work, but some industry watchers believe the company needs the space because it remains in hiring mode.

"Apple is bursting at the seams," said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, a market researcher.
The company is conducting work on two buildings near the southeast corner of Kifer Road and Uranium Drive in Santa Clara, according to documents filed in early August with the Santa Clara County Recorder's Office.

Together, the buildings total 73,000 square feet, according to property brochures, county records and commercial realty agents. One building, at 3000 through 3008 Kifer Road, totals 43,000 square feet. The other, at 2855 through 2865 Uranium Drive, totals 30,000 square feet.

A spokesman for Cupertino-based Apple confirmed these leases, but declined to discuss the matter further.

These buildings are just part of Apple's activity in the immediate area. About three blocks away, at 127 through 123 Uranium Drive, Apple has leased a 105,000-square-foot building where it undertook a significant renovation effort.

Santa Clara-based Orchard Commercial, the owner of the buildings at the corner of Kifer and Uranium, filed documents with county officials that stated Apple was undertaking construction work on both buildings.

Apple now has about 25,000 employees in the Santa Clara Valley, but a series of long-term leases and building and land acquisitions over the past four years - including its new "spaceship" campus for as many as 13,000 workers - would allow the company to nearly double that workforce in the coming years.

Among the company's biggest expansion moves besides the circular campus in Cupertino: Apple has laid the foundation to build a major campus in north San Jose, has leased a 777,000-square-foot office complex that will feature a curved building, and has leased big office buildings in Santa Clara from Peery Arrillaga that total 296,000 square feet.

"Apple is still doing a lot of hiring," Bajarin said. "Along with Google and Facebook, Apple is one of the major local tech companies continuing to expand."

Tech and realty experts believe Apple is likely to fill up unused offices at its campus on Infinite Loop in Cupertino even as employees transfer to the spaceship campus.

That's consistent with what numerous commercial realty agents say they have been hearing about Apple's plans for the properties or buildings it has leased or bought in recent years.

"We haven't heard of Apple putting any office space that it had leased back on the market for a sublease," said David Vanoncini, a managing partner with Kidder Mathews, a commercial realty firm. "We are not aware of any plans that Apple has to dispose of offices that would be left behind by moves into the spaceship campus."

Along with Apple, some companies such as Google have been busy collecting parcels and buildings for future development or expansions. Google has greatly widened its footprint in Mountain View and Sunnyvale, and has taken the first steps to create a vast transit village in downtown San Jose near an old train station.

"These big companies have deep enough pockets that they can land-bank properties," Vanoncini said.

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