Palo Alto Networks Buys Vacant

A cybersecurity company is the new owner of a Santa Clara site entitled for offices as the land is eyed to possibly include housing.

BXP sold a nearly 15-acre vacant property at 3625 Peterson Way in Santa Clara to an affiliate of Palo Alto Networks in an all-cash deal for $90 million, the Silicon Valley Business Journal reported. BXP bought the site in 2016 for $78 million. Its assessed value at the top of this year was $89.1 million, the Mercury News reported.

The property was home to a 218,366-square-foot office building that has since been demolished. A BXP affiliate previously submitted plans to build nearly 700,000 square feet of offices and parking facilities on the property. That proposal called for two eight-story office buildings connected by bridges and an accompanying four-level parking garage. The buildings under that plan each totaled 338,155 square feet for a combined 676,300 square feet, per Santa Clara records cited by the Mercury News.

The city approved architectural permits in 2022, as well as a permit extension earlier this year, though BXP’s extension request noted that market conditions could make the project infeasible. The request also claimed that the timeline for Silicon Valley Power to provide sufficient power to the site “exceeds a reasonable timeline to develop the site and attract tenants.”

In July, Bay Area-based SummerHill Homes submitted a preliminary application with the City of Santa Clara to build 292 townhome-style condominiums at the site. The City of Santa Clara is mandated by the state to plan for 11,632 new housing units by 2031.

Palo Alto Networks could pursue BXP’s proposal for offices, as the cybersecurity company’s headquarters are located adjacent to the 3625 Peterson Way site. Its exact plans for the former BXP property have not been disclosed. With BXP’s offices blueprint, the development location could be large enough to accommodate between 2,700 to 3,400 workers, according to the Mercury News. — Chris Malone Méndez