SAN JOSE — NetApp will move its headquarters to San Jose’s Santana Row and exit Sunnyvale after the tech giant struck a deal to sell its properties in Sunnyvale, executives said Thursday.
The company will move into 700 Santana Row, a modern office building that Splunk had previously leased and is now vacating ahead of the NetApp entry into San Jose.
“It’s great to have a storied Silicon Valley brand like NetApp moving its flagship to San Jose,” San Jose Mayor Sam Liccardo said in an interview.
NetApp sold its Sunnyvale campus for $365 million in a transaction that was accomplished in tandem with the tech company’s lease of the offices in San Jose. The NetApp lease appears to be the largest new office lease in the South Bay so far in 2021, and the Sunnyvale sale is one of the biggest property purchases in the region this year to date.
“Our constructive approach to the future of work and our new global headquarters will enable us to create a differentiated work experience that empowers our employees to deliver their best team-based work in a more connected space,” said George Kurian, NetApp’s chief executive officer.
The cloud-based data services and data management company is evolving to a flexible hybrid work mode, Kurian added. The coronavirus outbreak has intensified NetApp’s transformation to enable it to prosper in the COVID era, the company said.
“NetApp’s new headquarters will keep the company in the heart of Silicon Valley and more closely embed it with the local community,” NetApp said.
Throughout the rest of 2021, NetApp intends to further customize its new headquarters and start moving into the offices, the company said.
Tishman Speyer, one of the world’s most successful real estate development and investment firms, bought the NetApp campus in Sunnyvale, a complex of multiple buildings that totals 700,000 square feet.
“Silicon Valley is at the epicenter of the innovation economy and demand for high-quality office space, specifically around Moffett Park, is very strong,” said Rob Speyer, president and chief executive officer of Tishman Speyer.
Tishman Speyer intends to find new tenants for the Sunnyvale campus and will dangle an array of amenities in front of prospective occupants. Wide-ranging capital improvements are planned for the choice complex.
“Most of the property’s broad array of amenities, including a gym with basketball court, lockers, showers, outdoor volleyball court, executive briefing center, a full-service cafeteria, multiple kitchens, break centers, phone rooms, and other common areas, will be retained,” Tishman Speyer said.
In San Jose, executives with Santana Row quickly embraced the new tenant in the iconic mixed-use destination center of offices, restaurants, shops, hotel facilities, homes, entertainment hubs, and parks.
“As a dynamic live-work-play destination that attracts world-class companies, we are thrilled to welcome a leading global organization like NetApp to Santana Row’s lineup of office tenants,” said Jan Sweetnam, an executive vice president with Federal Realty, Santana Row’s principal owner and developer.
Both the purchase of the NetApp campus in Sunnyvale and the tech stalwart’s rental deal in San Jose were arranged by Savills, a commercial real estate firm. Savills executives Joe Brady, Michael Drew, Peter Hamann, John Brady arranged both transactions. Savills executives Kevin Kelly, Jess Johnson, and Bryan Ezell were advisers in the deals.
“With NetApp’s continued business transformation and its future of work strategy, it was clear we needed to find a new space that could accommodate the company’s needs today and beyond,” said Joe Brady, an executive managing director with Savills.
Although San Francisco-based Splunk has decided to exit the 700 Santana office building, it will continue to occupy a nearby office building, which totals 235,000 square feet. Splunk indicated that it was working with Federal Realty to terminate its lease at 700 Santana Row.
“We are finalizing the return of our 700 Santana Row office to the landlord, pending final details,” a Splunk spokesperson said. “The pandemic and recent feedback from our employees has caused us to reevaluate our future office space needs.”
NetApp leased 301,000 square feet at 700 Santana Row and will occupy the entire office building, according to Savills.
“NetApp could not have picked a more vibrant environment for its creative employees than Santana Row,” Liccardo said.