SUNNYVALE — Uber has struck a deal for a major Silicon Valley expansion with a big lease in downtown Sunnyvale that gives the tech company enough office space for up to 1,900 workers near a Caltrain station.
The ride-hailing company has agreed to lease two big office buildings in downtown Sunnyvale that together total roughly 291,000 square feet, according to multiple sources with knowledge of the transaction.
The office buildings are located within five blocks of the Sunnyvale Caltrain station and in a downtown area that is poised to undergo a major revitalization that will add a movie complex and a Whole Foods market to the mix.
Uber could potentially employ 1,400 to 1,900 workers, or even more, in the offices. Commercial real estate brokers Steve Horton and Kelly Yoder of Cushman & Wakefield; Jeff Houston and Vincent Scott of CBRE; and David Churton, Rich Branning, and Steve Clark of JLL arranged the transaction.
San Francisco-based Uber didn’t comment about the situation. The brokers involved in the transaction declined to discuss the matter.
One of the office buildings Uber leased is at 200 S. Mathilda Ave. and totals 157,000 square feet, while the other building, totaling 134,000 square feet, is located at 190 Mathilda Place. Both buildings are adjacent to Washington Avenue.
Uber is thought to be seeking extra locales beyond San Francisco for hubs where the company can employ tech engineers and experts.
“San Francisco is constrained when it comes to opportunities for a substantial footprint,” said Armand Tiano, executive managing director with Newmark Knight Frank, a commercial real estate firm. “It’s harder for tech companies to recruit employees in San Francisco.”
At one point in recent years, Uber tapped downtown Oakland for a major employment center outside of San Francisco. Eventually, however, Uber scuttled its East Bay expansion plans.
Downtown Sunnyvale has now emerged as a fresh Bay Area beachhead for Uber.
“The office buildings are right by the Caltrain station, and within easy walking distance,” said David Vanoncini, an executive vice president and managing director with Kidder Mathews, a commercial real estate firm. “It’s a transit play for Uber.”
Increasingly, larger tech companies based in San Francisco must also find ways to establish offices that are situated near the Bay Area’s primary centers for tech talent, which are in Silicon Valley.
“Silicon Valley is full of seasoned engineers,” Vanoncini said.
A growing number of tech companies have begun to eye multiple employment hubs in cities other than where their headquarters locations.
“When tech companies can triangulate in the Bay Area, find additional locations, they can tap into new labor pools,” Tiano said.
Google, besides finding ways to expand in its home base of Mountain View, has also created expansion sites in Palo Alto, Redwood City, Sunnyvale, and in multiple areas of San Jose, including that city’s downtown district.
Cupertino-based Apple has done more than establish a vast new campus at the doughnut-shaped Apple Park in its home town. Apple also has undertaken big leases in Sunnyvale and has assembled 85 acres in north San Jose for a potential future campus.
Menlo Park-based Facebook has added huge office buildings near its principal headquarters on Hacker Way, as well as crafted plans for a new Willow Campus in its home town. The social network has also created million-square-foot campuses in Sunnyvale and in Fremont.
Ultimately though, future expansion efforts such as the Uber leasing deal in Sunnyvale seem likely to gravitate towards transit hubs.
“All of these tech companies are looking for transit access,” Tiano said. “That’s what drew Uber to Sunnyvale, and that is what is drawing Google to downtown San Jose.”