SAN JOSE — Netgear has struck a deal that will enable the tech company to shift its headquarters into a San Jose building that has been empty for years.
The rental deal produced a successful outcome for a north San Jose office building that was the centerpiece in a money-losing odyssey of financial lost opportunities for the property’s prior owner, the Santa Clara County Housing Authority.
Common areas and gathering spaces at 3553 North First St. in north San Jose, concept. (Newmark)
San Jose-based Netgear leased all of an office building at 3553 North First St. in San Jose, according to sources familiar with the rental agreement.
The two-story building that Netgear leased totals 89,400 square feet and is at the corner of North First Street and Rio Robles. Newmark commercial real estate brokers Joe Kelly and Jon Mackey have been seeking tenants for the building.
“The global networking and Internet connectivity company will move into the building in October 2025 when its lease at 350 East Plumeria Drive in San Jose expires,” Newmark stated in a report about the Silicon Valley commercial property market.
Netgear’s leasing agreement arrives in the wake of the real estate fiasco that engulfed the building due to the blunders by the Santa Clara County Housing Authority, which presided over a troubled ownership of the property.
In 2020, the Housing Authority paid $37.35 million for the office building, according to a staff memo issued around the time of the purchase by the agency, whose primary mission is to bolster and encourage the creation of affordable housing.
However, in 2022, the Housing Authority sold the building for $24.5 million, documents filed with the Santa Clara County Recorder’s Office showed.
This means the County Housing Authority lost $12.9 million in the two years it owned the San Jose building.
The county agency’s pratfalls were noteworthy enough that the Santa Clara County Civil Grand Jury looked into the matter and issued a scathing report about the Housing Authority’s debacle with the office building.
“Flawed information, flawed decisions” was the title of the civil grand jury report on the county Housing Authority’s botched efforts over the purchase and sale of the office building. At one point, the housing agency had eyed the building as a future headquarters.
Alvarez & Marsal Capital Real Estate, acting through an affiliate, bought the building in an all-cash deal.
The purchase price was low enough that Alvarez & Marsal Capital was able to spend money on an array of upgrades for the office building.
The ownership group upgraded and modernized the lobby, renovated the cafe area and improved the exterior look. The property includes a half acre of open spaces.
Netgear’s current headquarters site at 350 East Plumeria Drive totals about 142,700 square feet, which means the tech company will wind up in less space than it is exiting.
Still, this deal and other recent office transactions mean tech companies and other corporations are seeking to lease space in Silicon Valley.
Among the recent high-profile rental agreements in the South Bay that have come to light within just the last few weeks:
–Snowflake reached a deal on a sublease of 773,000 square feet to occupy office buildings in Menlo Park.
— This month, Amazon agreed to a real estate transaction to occupy 217,000 square feet of office space in Mountain View.
— Nvidia has leased 101,600 square feet in north San Jose.
“It’s good that companies are transacting deals now,” said David Sandlin, an executive vice president with Colliers
