In a sign that the technology boom in Silicon Valley remains robust, high-profile tech firms Lab126 and the research unit of Samsung Electronics have struck deals for major expansions that would bring about 4,000 new workers to the South Bay.
“The tech boom is back,” said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, a market research firm. “Apple (AAPL) is a powerful force, as is Google (GOOG), Intel (INTC), Facebook, LinkedIn, Lab126, and so forth. Many tech companies are looking for a lot of tech talent.”
Lab126 has agreed to lease 581,000 square feet in Sunnyvale’s Moffett Towers complex, where 2,600 people could work, city officials said Wednesday. The company is the research and development unit for consumer products that could drive customers to Amazon products and services.
Samsung Electronics disclosed plans Wednesday for a major expansion of the company’s Silicon Valley operations with a new research and development campus in Mountain View that could accommodate 1,500 employees. The company intends to construct two buildings that would total 385,000 square feet.
“These companies are looking for a long-term commitment to Silicon Valley,” said Chad Leiker, a vice president with commercial realty brokerage Kidder Mathews. “They are in it for the long haul.”
City officials and industry insiders with direct knowledge of the deal say Lab126 has leased 581,000 square feet. One of the buildings totals 357,000 square feet and the other is 224,000 square feet. The deal was arranged through Cornish & Carey commercial realty broker Phil Mahoney, who declined to comment.
“We are extremely pleased that Sunnyvale continues to attract major tech companies,” Mayor Tony Spitaleri said in an interview with this newspaper. “We are looking forward to having Lab126 here.”
The lease also is a coup for San Francisco-based development firm Jay Paul. The company is the developer and principal owner of Moffett Towers. The 2 million-square-foot office complex is now full.
A number of tech companies have decided to expand into Sunnyvale. Apple has agreed to a string of leases for more than 1 million square feet there, while LinkedIn announced recently it would occupy a campus of about 580,000 square feet. Plus, Google, Hewlett-Packard (HPQ), NetApp, Juniper, Nokia, Microsoft, Motorola Mobility, Rambus, Financial Engines and Comcast have also expanded or moved into Sunnyvale for the first time in the past year or so.
“Have I seen it like this where you have a perfect storm of growth? No I haven’t,” said Gary Luebbers, Sunnyvale’s city manager.
The boom in Sunnyvale, Mountain View and other cities could spur retail and hotel development in both cities and other communities.
“These companies are creating more interest in hotel construction in Sunnyvale,” Luebbers said. “We are seeing significant interest from hotel developers. This will help our stores and restaurants. It will help our Town Center.”
In Mountain View, Samsung intends to begin construction on the R&D center in the second half of 2013. If all goes well, the complex should be open by 2014.
“Our new R&D center will provide an outstanding environment to support our plans for strategic growth and attracting the very best employees,” said Jay Chang, president of Samsung Information Systems America, one of the R&D units of Samsung Electronics.
“It’s very exciting to have Samsung decide to place its research and development center here,” said Ellis Berns, Mountain View’s city economic development director. “This brings more diversity to our business community.”
In August, officials with Samsung Semiconductor joined Gov. Jerry Brown at a ceremony to announce the expansion of its San Jose operations. The extent of that expansion, which is separate from the Mountain View plans, wasn’t disclosed.
“Silicon Valley is in the next tech boom phase, but how long it lasts, it’s hard to say,” Bajarin said. “But there is a lot of work to do to meet the demand for mobile devices, social networks, social media and so forth. And we haven’t even made the television fully digital yet.”
Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.
