SAN JOSE-Silicon Valley witnessed a building boom in 2021 that produced the most office construction in six years amid ongoing economic hurdles unleashed by the coronavirus, according to a new report.
The progress in office construction in Santa Clara County last year was sketched by a report from Cushman & Wakefield Research.
Rising construction is being driven by hot demand for office space on the part of tech titans – and it appears that tech companies will no longer be able to satisfy their hunger for elbow room.
“Silicon Valley tech and life science companies will build on their leadership as the bellwethers of the U.S. economy,” said the report released by Cushman & Wakefield, a commercial real estate firm. “Active requirements have increased since the height of the pandemic when many were on hold.”
By 2021, new office construction will reach 3.06 million square feet in Santa Clara County, the Cushman & Wakefield Research report said.
Total office construction in South Bay for 2021 will be slightly more than double the new office construction in 2020.
In March 2020, state and local government agencies imposed massive business closures to combat the coronavirus and many companies, including tech firms, made efforts for their employees to work from home.
However, as 2021 began a huge jump in office construction, last year’s total of 3.06 million square feet was less than the 6 million square feet of new office development in 2015, according to the research team. of Cushman & Wakefield.
Over the past five years and including 3.06 million square feet in 2021, new office construction reached 1.5 million in 2020, 2.43 million square feet in 2019, 1.38 million square feet in 2018 and 2.61 million square feet in 2017, it reported. of Cushman & Wakefield.
Major new construction projects in 2021, according to Cushman & Wakefield:
– The Yahoo office campus at 1199 Coleman Ave. north of San Jose, with a total of 657,000 square feet.
– A Google office campus north of San Jose at the corner of East Brokaw Road and North First Street with addresses that include 90 E. Brokaw Road. The four campus office buildings have a total of 611,000 square feet.
– One Santana West, an office building with a total size of 375,000 square feet at 3155 Olsen Drive in San Jose.
– ServiceNow headquarters campus expansion, phase 2, totaling 268,000 square feet on Lawson Lane in Santa Clara.
Several large leases in 2021 have helped drive demand for new office space in Silicon Valley.
In December, Facebook app owner Meta Platforms leased 719,000 square feet of offices in Sunnyvale on a large tech campus called Moffett Green owned by Tishman Speyer.
In May, Apple leased 700,000 square feet of Sunnyvale’s Pathline Park, a new tech hub.
Experts believe that demand for new office space will remain stable during 2022.
“There are now 8.9 million square feet of active office and tenant research requirements in Silicon Valley,” Cushman & Wakefield said in its report.
