Avaya Signs 275 KSF Lease for Santa Clara Office
- Dec 01, 2011
December 1, 2011
By Barbra Murray, Contributing Editor
Harvest Properties and Prudential Real Estate Investors have snagged a tenant for nearly half of the Towers at Great America, the partners’ 645,700-square-foot office complex in Santa Clara, Calif. Avaya, a global business-communications firm, has signed on to occupy approximately 275,200 square feet at the Silicon Valley-area property.
PREI relied on commercial real estate services firm CBRE for representation in the lease transaction, while the tenant turned to Cornish & Carey Commercial Newmark Knight Frank. Avaya’s new agreement is actually an extension of its current commitment to Great America. The company presently sublets 200,000 square feet at the complex, which PREI purchased from Nortel Networks in 2001 in a sale-leaseback transaction. PREI, later bringing in Harvest as the management team, transformed what had been a single-tenant site to an upgraded, multi-tenant destination with such offerings as an upscale café and state-of-the-art fitness facility. Other names on the tenant roster include Tellabs Operations and Citrix.
Avaya’s new lease deal is indicative of the ongoing recovery of the Silicon Valley office market. The vacancy rate has been on the decline, dropping to 14.69 percent in the third quarter, as per a report by commercial real estate services firm Kidder Matthews, and positive net absorption reached nearly 1 million square feet. It’s the large blocks of contiguous space that are paving the road to a full rebound. “Leasing activity among the big users in Silicon Valley once again kept the Class A office market very active over the last three months,” according to the report. Major transactions included Google’s agreement for 715,300 square feet at the Technology Corners complex in Sunnyvale, and Polycom’s commitment to 213,800 square feet at 6001 America Center Dr. in San Jose.
The forecast for 2012 is for more of the same. “Demand for high-image Class A space with considerable transportation options should remain high as companies seek to position themselves in the best location possible,” the report noted.
The Avaya deal was a boon for the Santa Clara submarket in particular, which closed the third quarter with a vacancy rate of 18.39 percent. “This sizable transaction bodes well for the overall local market,” Kristin Paul, a director with PREI, said. However, Avaya is not the only one that has demonstrated its faith in Santa Clara recently. KPMG signed on for approximately 82,700 square feet at 3975 Freedom Circle.