Apple has leased an entire 382,500-square-foot office campus in Sunnyvale, signaling a further commitment to physical workplaces despite recent delays and changes to its return-to-office plans.
The Cupertino-based maker of the iPhone signed a lease for the Class A complex two weeks ago, a person with direct knowledge but no involvement in the deal told The Real Deal on Wednesday. The property, called Mathilda Commons, spans two four-story Class A buildings at 625 and 655 North Mathilda Avenue and an adjacent parking garage. Level 10 Construction finished building the campus in September on behalf of Jay Paul Company, its owner and developer. It’s next door to two offices containing 424,000 square feet combined that Apple occupies, which means the company now rents four buildings within walking distance of each other.
An Apple representative didn’t respond to requests for comment. A Jay Paul spokesperson didn’t follow up on a request for comment after confirming receipt. Phil Mahoney, an executive vice chairman at Newmark and one of the campus’ listing brokers, would only confirm to The Real Deal that it’s now leased before declining further comment. A Newmark team of Mahoney, Mike Saign and Julia Szabo represented Jay Paul in the deal.
The latest transaction by Apple comes almost exactly one year after the company leased almost 700,000 square feet of Class A office space spread across six completed and planned buildings less than a mile away. That lease was the region’s second-largest last year in terms of square footage, behind Meta’s 719,000-square-foot deal, also in Sunnyvale.
Apple has since doubled down on Sunnyvale’s commercial property market, acquiring a 105,000-square-foot industrial building it was already renting for $44 million and leasing an 86,000-square-foot office and research center. Its appetite for office and research space has spilled over into neighboring Santa Clara, where it grabbed a 130,000-square-foot property. Those leases in Santa Clara and Sunnyvale happened last quarter, according to Colliers’, CBRE’s and Newmark’s latest Silicon Valley quarterly market reports. While each of the brokerage firms listed the tenants in those deals as “confidential,” people with knowledge of the transactions who requested anonymity told The Real Deal that Apple was the lessee in both instances.
All of these new space commitments come despite Apple recently suspending its mandate that employees return to the office at least three days a week because of a surge in Covid cases. Prior to the change, the company faced pushback from thousands of workers, who were initially supposed to start coming back late last month. It said in a note to employees in mid-May that it would bring some of them back to the office twice a week in the weeks ahead, according to The New York Times. Anyone who felt uncomfortable with the return-to-office program would have the option to work remotely, the newspaper said.
Apple’s lease on Mathilda Commons shows that despite near-term uncertainty surrounding its return-to-office vision, its long-term outlook on the necessity of physical workplaces remains bullish. And it’s not taking down cheap space: Jay Paul’s asking rental rate on Mathilda Commons was $5.65 a square foot a month, which is on the higher end for Silicon Valley offices, according to Newmark data. It’s unclear how much Apple is paying at the start of its lease term.
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Commercial
San Francisco
Software outfit adds 152K sf, fills whole Sunnyvale office