Nokia Signs Big Sunnyvale Lease in Brand New Office Project
SILICON VALLEY BUSINESS JOURNAL
SEPTEMBER 25, 2018
Nokia Corp. has signed a big lease for a building that has barely started construction in Sunnyvale’s growing Peery Park, where developers and tech companies have been digging in on new projects and signing leases fast.
Multiple sources with knowledge of the deal told the Business Journal last week that Nokia, a Finnish telecommunications, IT and electronics company, has signed a 231,000-square-foot lease for a four-story project set to rise at 520 Almanor Ave. in Sunnyvale. The project is currently under development by Menlo Park-based Lane Partners.
Nokia is expected to consolidate its existing footprint in Sunnyvale and Mountain View into a single building at 520 Almanor, sources close to the deal told the Business Journal. A conservative calculation of about one employee per 200 square feet of office space shows more than 1,150 people could work in the Peery Park building when it opens in the second quarter of 2020. News of the lease was no shock to Silicon Valley real estate insiders who have been watching the area closely.
“There’s a number of different tenants looking in that neighborhood,” Phil Mahoney, an executive vice chairman for Newmark Knight Frank, said in an interview Monday. “The fact that [520 Almanor] was somewhat of a pre-lease is not at all surprising. There will be more of that to follow.”
Room for growth
Indeed, if recent history has shown anything, it’s that Peery Park is heating up. Nokia’s lease is just one example in a string of recent leases and pre-leases in the area, one of the few parts of the Peninsula and northern area of the South Bay that still has room to grow.
“Clients today that don’t want to be in Santa Clara or North San Jose… but want to stay in that Sunnyvale, Mountain View, Palo Alto area, will look at Peery Park,” Mahoney said.
Already, Synopsys has pre-leased more than 360,000 square feet in the first three planned buildings at Irvine Co.’s 1.47 million-square-foot Pathline Park development, which is the largest planned project in Peery Park.
Then in May, genetic testing startup 23andMe confirmed to the Business Journal it planned to move out of its Mountain View headquarters next year to a brand-new, 145,500-square-foot building at 221 N. Mathilda Ave. in Sunnyvale developed by Spear Street Capital.
Meanwhile, a big portion of the 450-acre Peery Park area has seen movement on a long list of developments since the city adopted a zoning code, known as a specific plan, for the district in September 2016. That plan made way for about 2.2 million square feet of net new commercial development the area.
The Peery Park district currently has more than a dozen projects somewhere in the pipeline, including developments by Simeon Commercial, Dollinger Properties, Invesco, Jay Paul Co. and JP DiNapoli Cos Inc.
Nokia’s expected consolidation
Nokia is planning to move out of a handful of buildings in Mountain View and Sunnyvale to make the leap to one of the developing projects in the district.
Currently, the company leases 56,960 square feet on five floors at 200 S. Mathilda Ave. in Sunnyvale. That location, which opened in 2010, is home to its Nokia Bell Labs, Nokia Technologies, Mobile and Fixed Networks divisions, according to the company’s website.
Nokia also leases multiple buildings in and around the Mountain View Research Park, a 16-office campus owned by Boston Properties that is sprawled across 40.57 acres near where the cities of Mountain View and Sunnyvale meet.
Recent Business Journal reporting shows the company leases, or has recently leased, approximately 175,300 square feet in four buildings at 701, 777 and 805 E. Middlefield Road and 765 Ravendale Dr., also known as 440 N. Bernardo Ave. in Mountain View.
A representative for Nokia declined to comment on the lease or real estate consolidation over email last week, noting “there is still work to be done and it’s a bit premature.”
The consolidation of the Mountain View offices found in Business Journal reporting and Nokia’s Sunnyvale location to Lane Partner’s 520 Almanor project would almost be a wash in terms of overall square footage for the company.
Mark Murray, principal for Lane Partners, last week also declined to comment on whether the building was fully leased. But he did confirm the development was newly underway.
When finished, the building will have floorplates that span more than 50,000 square feet each. That’s an attractive draw in Silicon Valley, where employers — propelled by years of workplace studies on productivity and the benefits of chance encounters by employees — are increasingly trying to lease or build structures where more employees can work in the same building, but more preferably, the same floor.
In addition to the office space, the project will come with 4,000 square feet of retail, 7,000 square feet of outdoor terrace space and a parking ratio of three spots per 1,000 square feet of commercial space.
Cushman & Wakefield’s Ken Candelaria, Steve Horton, Dave Hiebert and Kelly Yoder are the listing agents tasked with marketing the development. Representatives for Cushman & Wakefield declined to comment for this story.