The Cupertino Courier

News

Cupertino office space availability is low

By HUGH BIGGAR

In a sign of a slowly rebounding economy, Cupertino's available office space for lease is among the lowest in Silicon Valley.

According to figures published in May, Cupertino had the largest drop in space for lease, with a vacancy rate about half of the Silicon Valley average of 16.8 percent.

"It's an indication the economy is coming back, since there was a surplus of office space available [after the dot-com recession]," said Dave Knapp, Cupertino's city manager.

"I think it's a positive sign, but it's all [relative]," said Christine Giusiana, director of the Cupertino Chamber of Commerce, pointing out the city is a desirable location and has a limited supply of available place compared to most cities. She also noted Apple Computer's role in the Cupertino market.

Apple--flush with Ipod success--has leased office space at seven sites throughout Cupertino since 2004. The sites include Lanzaneo Drive, Mariani Drive, Bandley Drive and Bubb Road. As a part of that success, Apple CEO Steve Jobs told the Cupertino City Council in April the company's business has tripled in the last five years and plans to build a new campus in Cupertino.

"Once Apple builds it's new campus, there will be a lot more office space suddenly available," Giusiana said. The campus is still in the development stage, and construction is tentatively scheduled to be completed in three or four years.

For now, Apple's success, limited existing space and Silicon Valley's reviving fortunes have created a tighter office space market for Cupertino, which as of June 1 had a vacancy rate of 7.3 percent or 234,550 square feet available overall. By comparison, nearby Sunnyvale had 938,069 square feet available or a rate of 17 percent. Downtown San Jose had a vacancy rate of 25 percent.

Despite the low numbers for Cupertino, Knapp cautions the market isn't what it once was, and there is still room for improvement.

"We still have a long way to go," he said.