Netgear to Downsize HQ With Office Lease in North San Jose

Netgear has leased a two-story office building in north San Jose, where it will downsize its headquarters.

The computer hardware firm signed a lease for the 89,400-square-foot building at 3553 North First Street, the San Jose Mercury News reported.

Terms of the deal with Alvarez & Marsal Capital Real Estate, based in El Segundo, were not disclosed. Brokers Joe Kelly and Jon Mackey of Newmark held the listing.

Netgear will move into the building in October when its lease expires at its 142,700-square-foot hub at 350 East Plumeria Drive, in San Jose. Its net reduction in offices: 53,300 square feet.

Alvarez & Marsal Capital bought the hexagonal building on North First Street in 2022 for $24.5 million, or $274 per square foot.

The seller in the all-cash deal was the Santa Clara County Housing Authority, which two years before had paid $37.35 million, or $418 per square foot.

The loss to the county on what initially was supposed to have been the agency’s future headquarters prompted a Santa Clara County Civil Grand Jury investigation, which issued a report entitled, “Flawed information, flawed decisions.”

The Netgear deal is the latest in the South Bay, where vacancy in Silicon Valley hit 22 percent in the third quarter, according to JLL.

This month, Nvidia, the chipmaker that helped launch an artificial intelligence boom, leased a 100,600-square-foot building at 300 Holger Way in north San Jose.

The deal comes seven months after the high-flying chipmaker bought its eight-building, 550,000-square-foot headquarters at 2788 San Tomas Expressway in Santa Clara for $374 million, or $680 per square foot.

It also follows a surge in leases for offices in Silicon Valley, where the market teetered after a tech-led shift to remote work.

This month, Amazon.com struck a licensing deal with WeWork for 217,000 square feet of offices at 401 San Antonio Road in Mountain View.

Also, Snowflake subleased 773,000 square feet of offices from Meta at a four-building campus at 125-135 Constitution Drive and 100-150 Independence Drive in Menlo Park, the biggest Bay Area office lease in more than a decade.

Add these to a string of deals at a new building in San Jose’s Santana Row, and market insiders see the beginning of what may be an office rebound.

— Dana Bartholomew