NetApp, Santana Row both win big in tech firm’s HQ move
Sale of Sunnyvale complex nets cloud data company $365M in proceeds
SAN JOSE >> The NetApp decision to move its headquarters to San Jose’s amenityrich Santana Row is poised to produce a big-time win for both the tech company and the iconic mixed-use destination center.
In the most stunning real estate deal so far in 2021, NetApp, Santana Row owner Federal Realty, veteran developer Tishman Speyer, and commercial property brokerage Savills worked together to craft two transactions that allowed NetApp to move its headquarters to San Jose and simultaneously sell its Sunnyvale main complex.
As a result of the Sunnyvale part of this complex transaction, NetApp was able to pocket $365 million in proceeds from the sale of several parcels.
The San Jose leg of the deal sets up a major win for NetApp with its new headquarters at a modern office building that features an eye-catching curve and rooftop deck, as well as a big win for Federal Realty Investment Trust, the principal owner and developer of Santana Row.
NetApp leased 301,000 square feet at 700 Santana Row and will occupy the entire San Jose office building.
The 700 Santana Row lease was arranged by Savills executives Joe Brady, Michael Drew, Peter Hamann, and John Brady; and Newmark broker Armand Tiano, an executive managing director with the commercial real estate firm.
“This really is a tremendous result for our client, NetApp,” said Hamann, an executive managing director with Savills. “NetApp is very happy about this. They have all the amenities you can imagine right outside their front door.”
Featuring a mix of offices, homes, shops, restaurants, hotel facilities, entertainment hubs, and open spaces, Santana Row has become a regional draw.
“Santana Row’s mixeduse live-work-play environment and amenities, coupled with its superb Silicon Valley location, are significant tools for employers competing to attract today’s knowledge worker,” said Jan Sweetnam, an executive vice president with Federal Realty.
With two tech major tenants, NetApp and Splunk, Santana Row’s fortunes have been bolstered and the center’s strengths have widened.
Prior to the NetApp deal, Splunk was the sole big tech tenant at Santana Row.
“The deal diversifies the tenant group,” Hamann said. “With two large publicly traded tech companies as office tenants, that mitigates risk and is better than having everything in one basket.”
Splunk will retain its offices at 500 Santana Row in the wake of the company’s lease termination at 700 Santana Row, where NetApp is moving its head offices.
“With the evolving hybrid work model combining in-office collaboration and remote work, the amenity-rich environment at Santana Row represents a significant advantage in employee recruitment and retention,” Sweetnam said.
Santana Row is also part of a bustling commercial hub that includes Westfield Valley Fair, one of the nation’s most successful malls.
Gambling that the coronavirus threat has begun to recede, a growing number of tech companies are now starting to actively fashion scenarios for returning to their offices.
“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,” NetApp chief executive officer George Kurian said.
Over the coming several months, NetApp intends to put the finishing touches on its future headquarters at Santana Row.
“As NetApp plans a return to the office, they can show their employees that this is a reset and a fresh start,” said Hamann, who noted that the Savills San Jose offices are next to Santana Row. “I believe the NetApp employees will be thrilled by their new location.”