John Deere’s agriculture tech subsidiary is in talks to sublease the Santa Clara headquarters of electric vehicle maker Seres, a potential deal that would take another large building off the market in the city’s lagging office sector.
Blue River Technology, which John Deere acquired for $305 million in 2017, is negotiating with Seres to take the entire 83,590-square-foot building at 3303 Scott Boulevard, a developer with knowledge of the talks who requested anonymity told The Real Deal. A broker who isn’t directly involved in the deal and asked not to be named said discussions were ongoing as of two weeks ago. Another broker who isn’t involved in the deal told The Real Deal on Thursday negotiations are ongoing but the deal isn’t done.
Neither Blue River nor Seres responded to calls and emails seeking comment. CBRE, which is marketing the Scott Boulevard building for sublease, declined a request for comment. Newmark’s Jeff Ramirez — Blue River’s tenant rep broker, according to the developer with knowledge of talks — didn’t respond to requests for comment.
The four-story Class A property is still available for sublease as of Thursday, according to CBRE’s website, which doesn’t list an asking rental rate.
Blue River is currently based in a 64,700-square-foot office and warehouse building in neighboring Sunnyvale, about 3.5 miles west of Seres’ headquarters, according to data from Reonomy, a commercial real estate analytics firm. The company’s main product is a robot that uses cameras and machine learning to distinguish between crops and weeds, allowing farmers to target and spray only the latter with herbicides. John Deere is incorporating the latest iteration of that technology into its next line of certain crop sprayers, which Blue River says can reduce herbicide use by more than two-thirds compared with traditional spraying.
If Blue River ends up subleasing 3303 Scott Boulevard, the deal could be taken as another sign of optimism for Santa Clara’s office market, which is burdened by a glut of vacancies. The city’s office vacancy rate was almost 30 percent at the end of last quarter, higher than 16 other Silicon Valley submarkets, according to Cushman & Wakefield data. Amazon and Applied Materials have combined to lease or sublease more than 400,000 square feet of offices this year, but more large transactions will need to get done to make a noticeable dent in the vacancy rate for such properties.
Seres, meantime, is trying to shed an office that became surplus to requirements after it shelved plans to introduce one of its electric car models to U.S. consumers in 2019, citing a recent downturn in the Chinese economy and the two countries’ ongoing trade war as reasons. The company’s lease on its Santa Clara headquarters, which opened in 2017, expires on Aug. 1, 2029, according to CBRE’s brochure marketing it for sublease.
Formerly known as SF Motors, Seres is the U.S. subsidiary of Chinese automaker Sokon, which created it in 2016 to be its entry into the electric vehicle market. Seres’ 2017 acquisitions of a car assembly plant in Indiana and an electric battery startup headed by Tesla co-founder Martin Eberhard generated some buzz about its potential to compete with the likes of Tesla, but that momentum came to a halt when it hit pause on its U.S. plans in July 2019.
Tech news site The Verge said at the time that the company would lay off 90 people in its Santa Clara office, about 30 percent of its workforce there, although Seres’ then-CEO James Taylor disputed that report, saying in a news release that the company cut only 47 jobs nationwide after suspending its U.S. product launch. The vehicle maker has yet to resume those plans and has instead focused its efforts on growing its brand in China, partnering with Chinese telecommunications company Huawei to develop an electric car there.