Sunnyvale has found the blueprint for creating a prosperous downtown.
Officials have figured out how to balance retail, housing and offices in the city’s core, even with an aggressive plan to build out nearly 1 million square feet of new office space in downtown. Sunnyvale is confident it will attract employers with its live, work and play downtown formula.
District 2 Councilmember Alysa Cisneros, who represents downtown, said she heard concerns about the office space while it was being built, but isn’t surprised to see it fill up. She said new offices, housing and retail will all support each other.
“We are building and developing a diversity of different build types, and we’re building the housing to sustain it,” Cisneros told San José Spotlight. “There’s a lot of anxiety in other cities about building a lot of housing downtown or a lot of offices, because that feels really risky. We’re successful because we understand the interconnectivity of it.”
Sunnyvale’s 18% office vacancy rate shows the plan is working, according to Cushman and Wakefield’s 2025 second quarter market analysis. Neighboring cities reporting higher vacancies include Santa Clara at 21.9% and Mountain View at 30.5%.
Downtown Sunnyvale has seen tremendous change over the past few decades, after the mostly-vacant Sunnyvale Town Center mall was torn down in the mid-2000s. A coalition of developers and investors known as Cityline is redeveloping the 36-acre site, which also includes hundreds of new apartments and more retail space.
Heather Gerlach, founder of marketing firm MDR Consulting with Cityline, said the project has received attention from interested businesses, residents and tourists. Gerlach organizes community events hosted by Cityline, which she said captures the attention of prospective office tenants.
“There’s this whole concept which is called golden handcuffs, where offices have these amenities inside, but your boss is over your shoulder and you can’t leave,” Gerlach told San José Spotlight. “Having a community where the office is separate but it has those different amenities around it is so perfect for people looking for space.”
Two companies drawn to the downtown are Databricks, an AI data intelligence platform, and publicly-traded cyber security business Crowdstrike.
Databricks is moving into a 305,000-square-foot office at 200 Washington Ave. John Rupert, senior director of development at Hunter Properties with Cityline, said the company is working on the final touches and plans to occupy the space next year.
“Office leasing has been challenging throughout the Bay Area as we come out of the pandemic,” Rupert told San José Spotlight. “However, we always believed that the mixed-use environment and first-class amenities that we offer at Cityline would eventually see us through — and it has.”
Downtown Sunnyvale is already surrounded by neighborhoods, where locals regularly visit historic Murphy Avenue.
Mike Johnson, executive director of the Sunnyvale Downtown Association, said dozens of top tier companies have a footprint in the city, so there’s a high demand for office space. While there was a pause during the COVID-19 pandemic, Johnson said the city’s reputation for its safety and amenities continues to draw interest.
Johnson said downtown will soon have a complete customer “cycle,” with office workers visiting businesses during the day and residents visiting businesses in the evening.
“So many companies were hesitant about leasing property during (the pandemic), but we’re passing that threshold now,” Johnson told San José Spotlight.
Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X.
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