PwC Leases 209,000 SF in Long-Vacant Silicon Valley Office Building

November 19, 2010
By Barbra Murray, Contributing Editor

Dust away the cobwebs at the Sobrato Building in the Silicon Valley city of San Jose. PricewaterhouseCoopers L.L.P., or PwC US, has staked a claim to more than half of the 380,000-square-foot office tower, which has sat vacant since its 2002 completion. The mega accounting and consulting firm signed a 15-year lease with Oracle America for 209,000 square feet to accommodate its expansion and relocation from down the street.

The Sobrato Organization developed the 17-story tower, which sits downtown at 488 Almaden Boulevard and features a seven-level 1,200-space parking facility, in 2002 and then sold it to BEA Systems Inc. with a vacant tenant roster in 2007 for $135 million. Before BEA could occupy what would have been its corporate headquarters, the property fell into Oracle’s hands when Oracle acquired BEA for $8.6 billion in 2008.

PwC has been seeking extra elbowroom for its staff of 1,200 for quite some time in anticipation of continued growth; next year alone, the firm plans to create 100 new positions. PwC did some shopping around before–much to the relief of San Jose city officials–choosing the big blue building for the flexible commuting options the location provides and its proximity to PwC’s clients. Once build-out of the new tenant’s eight floors is completed, staff members will work in a technologically advanced and environmentally friendly environment. They will also be able to utilize an onsite fitness facility and an interactive café.

It will be an easy move for PwC, as the firm currently makes its home practically just a stone’s throw away at 10 Almaden Boulevard, where it occupies 165,000 square feet. The scheduled relocation date is set for June 2011, at which point the Sobrato Building will be renamed the PwC Building.

PwC relied on real estate services firm CB Richard Ellis for representation in the lease transaction, while Colliers International stood in for Oracle. Financial terms of the agreement have not been disclosed, however, the average asking rent for Class A office space in San Jose is $2.61 per square-foot, according to a third-quarter report by Grubb & Ellis Co.

Vacancy rates are tumbling down and leasing activity is on the upswing in the Silicon Valley office market as unemployment numbers continue to improve. Significant transactions during the third quarter include AOL’s sublease of approximately 225,000 square feet in Palo Alto from Google, Tellabs Operations Inc.’s commitment to 77,100 square feet in Santa Clara and PMC Sierra’s take of 62,000 square feet in Sunnyvale.