Two years after opening its newly built Campbell headquarters, 8×8 has put the 178,000-square-foot office on the market for sublease, The Real Deal has learned.
The cloud communications company is seeking one or more subtenants for the five-story building at 675 Creekside Way, next door to a Marriott-branded hotel and about half a mile from the Pruneyard open-air shopping center. Completed in 2019, the property is owned by New York’s Joss Realty and Australian private equity firm Qualitas, which teamed up to acquire it in March 2020 for $139 million, or about $781 a square foot.
The building is available for sublease through Dec. 31, 2030, and divisible by floor, according to a marketing email forwarded to TRD. That’s the balance of 8×8’s term, said brokers familiar with the company’s lease. The asking rate is negotiable, those brokers said.
An 8×8 spokesperson didn’t respond to specific questions about the Campbell sublease listing, but confirmed the company moved into the property in early 2020. The move-in finished about a month before local health officials issued a Bay Area-wide shelter-in-place order, a person with credible knowledge said.
The company still uses the space, the person said. While the likes of Google, Apple and Goldman Sachs have mandated their employees make partial or full returns to office life, 8×8 hasn’t publicly disclosed a return-to-office date.
JLL’s Derek Johnson, Scott Mathisen and David Ross are the agents marketing 675 Creekside Way for sublease. The firm represented 8×8 in a 2019 lease of a satellite office at 150 Spear Street in San Francisco, one of two that the latter has recently opened in the Bay Area, according to CompStak data and brokers familiar with its local footprint. The address and size of the other one, located in the East Bay, are unclear; JLL didn’t respond to requests for comment.
8×8 put its headquarters on the market last month, when Netflix listed a two-building, 165,000-square-foot campus in neighboring Los Gatos for sublease, the person with knowledge of the decision said. While both coming to market may portend a rise in sublease availability in Silicon Valley’s office market, the sector’s high concentration of Fortune 500 tenants has prevented it from seeing the sort of uptick that has recently hit San Francisco. Silicon Valley’s approximately 3.7 million square feet of office sublease inventory is about three-quarters the size of San Francisco’s, according to second-quarter Cushman & Wakefield data.
Still, the Valley’s office sublease inventory has increased by 32 percent from the first three months of 2021 to the end of last quarter, Cushman data show. As for 8×8, its total costs, which include lease commitments, continue to grow with revenue, according to stock market news site Seeking Alpha. Shares were trading at $4.80 before the market closed Sept. 7, the lowest valuation in a decade, according to a Sept. 6 Seeking Alpha report. They’re down about 32 percent over the past three months, compared with a loss of nearly 4 percent for the S&P 500 during that time, the report said.
Revenue growth continues to be a bright spot for 8×8, as it’s up nearly 27 percent from about a year ago, according to a Sept. 6 Seeking Alpha report. Yet the company hasn’t grown its bottom line since 2014 despite predictions that its business model would flourish in a stay-at-home economy.
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Netflix lists Los Gatos campus for sublease