MOUNTAIN VIEW — Amazon has struck a deal to rent a big office building in Mountain View, fresh evidence that the ice-cold office market has begun to thaw in the South Bay.
The rental deal by Amazon, another tech company’s huge sublease agreement in Menlo Park in late November, and a string of big office deals at a new office building in San Jose’s Santana Row neighborhood have raised hopes that a real turnaround has emerged for top-notch Silicon Valley office properties.
Amazon has rented 217,000 square feet at 401 San Antonio Road, a relatively new office building in Mountain View, according to sources with knowledge of the transaction.
The e-commerce titan agreed to take space that LinkedIn had previously subleased from WeWork, the sources stated.
With this deal, tenants are filling up most of the spaces in 401 San Antonio Road and the adjacent 391 San Antonio Road office buildings in Mountain View.
Colliers, a commercial real estate firm, is seeking tenants for the two buildings, which are relatively new and were constructed in 2015.
The Amazon transaction in Mountain View, along with the Snowflake agreement to sublease 773,000 square feet in Menlo Park, suggests the office market is beginning to heal from the economic maladies unleashed by the coronavirus.
“When you see larger companies take big tranches of office space, smaller companies are going to follow suit,” said Chad Leiker, a first vice president with Kidder Mathews, a commercial real estate firm.
Plus, the One Santana West office building at Santana Row in San Jose has been successful in landing an array of tenants, steadily filling up the building.
In recent years, tech companies have begun to orchestrate waves of layoffs. in 2022, 2023 and 2024, more than 49,000 tech jobs have been eliminated in the Bay Area, according to official state government filings.
Tech companies also have exited millions of square feet of office spaces in the Bay Area in recent years, making the empty spaces available for sublease.
The departures by tech companies and other corporations have also triggered a wave of loan delinquencies and foreclosures of office buildings around the Bay Area, with the problems becoming particularly pronounced in San Francisco, which is mired in an economic “doom loop” in the view of some observers.
An uneven return to the office on the part of tech companies, even after the end of coronavirus-spawned business shutdowns, has added to the forbidding economic landscape.
Lately, however, a growing number of tech companies have been stating their intentions to mandate that people work from the office for more days a week.
“More and more companies in Silicon Valley will have people working in offices in 2025,” Leiker said. “If that happens, it will bring us closer to where we were in the old days” before the coronavirus outbreak.
