Barely a month after its ballyhooed IPO, Uber Technologies Inc. is set to make its big entrance into the South Bay via a major lease in a growing part of downtown Sunnyvale.
The San Francisco-based rideshare company is slated to take two five-story buildings, at 190 and 200 Mathilda Place, totaling about 290,000 square feet in all, according to a source with direct knowledge of the deal. Industry insiders have said for months that Uber is looking to move its existing Palo Alto office in Stanford Research Park, to the South Bay as it looks to grow.
Uber in 2016 signed a sublease with VMWare for 140,000 square feet at 900 Arastradero Road in the research park, according to San Francisco Business Times reporting at the time.
“The majority of tenants, when I lease space in Sunnyvale … are tenants from Mountain View and Palo Alto that can’t find space,” said Dave Sandlin, executive vice president for brokerage Colliers International. “Our market [in Sunnyvale] offers everything those markets have, plus expansion space.”
Earlier this year, Uber was considering either leasing the buildings along Mathilda Place, or joining other big tech companies — including Synopsys and Proofpoint Inc. — that have pre-leased buildings at Newport Beach-based Irvine Cos.’ 49.5-acre, 1.47 million-square-foot Pathline Park developmentin Sunnyvale’s Peery Park near downtown, according to sources with knowledge of the negotiations.
Sandlin said he isn’t surprised that Uber opted to lease the buildings in Sunnyvale’s downtown, in part because they are closer to the Caltrain Station, but also due to the timing of Uber’s planned move.
“Uber’s requirement was roughly for 200,000 square feet now, and 200,000 square feet two years from now,” Sandlin said. “With the activity that is going on around Peery Park and the demand out there, Irvine realistically wouldn’t say ‘O.K., I’m going to give you 200,000 square feet now and I’m going to hold off on a building for two years from now.'”
The building at 190 Mathilda Place is where Broadcom Inc. once had an office before a slew of layoffs last year caused the company to shrink its local footprint. That building spans 133,966 square feet and is available in the near term.
Meanwhile, 200 Mathilda Place, which is about 156,960 square feet in size, is currently occupied by Nokia Corp. However, the Finnish telecom and electronics giant last year pre-leased a new building in Sunnyvale’s nearby Peery Park, where it plans to consolidate some of its local offices in the coming years.
A representative for Uber on Friday did not immediately provide comment on the lease and planned move, but this story will be updated when or if the company responds.
Uber’s new offices sit adjacent to where a joint development group called STC Venture, made up of Sares Regis of Northern California, Hunter Storm and J.P. Morgan Asset Management, are currently building a new mixed-use project called CityLine Sunnyvale.
When complete, CityLine Sunnyvale will bring to the city’s downtown about 1,000 new residential units, several new office buildings and retail space, including a Whole Foods and an AMC Theater nearly abutting the Sunnyvale Caltrain Station.
David Churton of brokerage JLL represented Uber in the deal. Jeff Houston of CBRE and Steve Horton of Cushman & Wakefield represented the property owner, a fund known as SPF Mathilda LLC, in the lease transaction.
Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.