It’s a Migration, Not an Exodus
February 9, 2022 | Erik Hayden | Urban Catalyst
Even in the midst of a multi-year pandemic that’s inflicted great damage to businesses and industries across the country, the commercial real estate sector in the Bay Area has been thriving. As of late we’ve seen record price tags for acquisitions and leases, and lots of new construction.
How has commercial real estate managed to flourish throughout Covid?
The key driver–as has been the case for decades–is the tech industry. Bay Area tech companies have continued to grow throughout the pandemic. Some of the world’s biggest companies and best-known brands have made headlines recently for massive expansion plans.
And while the myth of a mass exodus from Silicon Valley has been debunked many times over, there has in fact been movement among these companies. Rather than an exodus, there has been a migration. Macroeconomic trends show a migration to the South Bay, with San Jose a prime beneficiary.
Simply put, cities further north, like Palo Alto and Mountain View, have largely been built out. Google dominates office space in Mountain View, while Apple occupies a huge share of Cupertino’s office space. Sunnyvale has benefited from much of the overflow growth over the past decade, but now it, too, is close to being built out.
Next up is San Jose, with plenty of available space and a pro-development city government. Microsoft and Apple have taken large land holdings, while Adobe is building another tower at its corporate headquarters downtown. Then there’s Google, which plans to build a mega-campus along the western edge of downtown.
It’s not just the behemoths. Biotechnology startup Allay Therapeutics announced in January that it’s moving its headquarters out of Menlo Park and into north San Jose, explaining to the Silicon Valley Business Journal that it had outgrown its space.
Urban Catalyst saw this migration coming when we formed the company in 2018. We may have been one of the earlier firms to see it coming, but we’re by no means the only one. Numerous other developers–both smaller regional ones and large national organizations–are working alongside us to accommodate this tech industry growth by building modern Class-A office space.
It’s a win-win-win: for developers, for the tech industry, and for our community.
