Apple is gifting itself an early holiday present with a $216 million purchase of a pair of Silicon Valley office buildings near its global headquarters.
The iPhone maker closed on a deal this month for 19319 and 19339 Stevens Creek Blvd. in Cupertino, California, the company confirmed, a purchase that extends a series of blockbuster investments the tech giant has made over the past year to quickly expand its vast office portfolio.
The company has fully leased both buildings — which total just shy of 260,000 square feet — since Sand Hill Property Co. built the properties about a decade ago. Sand Hill was also the seller in the deal with Apple and is the developer behind the rest of the 18-acre Main Street Cupertino, a mixed-use project that includes retail space, a hotel and more than 100 apartments.
The deal marks Apple's fourth major Silicon Valley real estate purchase so far this year, boosting its total investment to more than $1.1 billion over the past several months.
"The Santa Clara Valley has been our home for nearly 50 years, and we're proud to continue investing in world-class facilities here that are designed to foster innovation and collaboration amongst our team members in support of our customers around the world," Kristina Raspe, Apple's vice president of global real estate and facilities, said in a statement to CoStar News.
Recent dealmaking
Apple has been behind some of the largest and priciest deals to close in the Silicon Valley area since the beginning of the year, according to CoStar data. The newest Cupertino purchase solidifies its recent streak of acquiring properties in which it has long occupied as a tenant.
The tech giant closed on the four-building Mathilda Campus in nearby Sunnyvale, California, for $365 million in September. That acquisition followed closely behind a pair of purchases Apple finalized that collectively totaled nearly $520 million.
The largest of those purchases was a $350 million deal for the two-building Mathilda Commons campus in Sunnyvale, just a few weeks after it paid $167 million for the Cupertino Gateway complex located a few blocks from its iconic Silicon Valley headquarters.
All four of its recently closed acquisitions have effectively transitioned the tech company from being the properties' sole occupant to its new owner.
Long-haul approach
The deals contribute to the growing view that global tech companies are evolving beyond the days of significant cuts and widespread lease terminations, both of which devastated the national office market as the sector scrambled to adapt to the fallout from the pandemic.
The Silicon Valley market has increasingly shown signs of stabilization, with companies such as Apple, LinkedIn, Walmart and Amazon committing to larger blocks of space for longer periods as they appear willing to return to their pre-pandemic days of real estate expansion.
What's more, Apple's decision to own, and not lease, its space underscores its willingness to remain in the area long term and invest heavily in doing so.
That commitment is the latest boost to the Silicon Valley office market, as the global tech capital recently reported its highest quarterly leasing volume since 2022.
To be clear, Silicon Valley's vacancy rate remains at a high of about 15.5%, according to CoStar data, a product of tech companies quickly offloading vast portions of their portfolios in response to the pandemic.
Yet, surging demand among artificial intelligence companies and ramped-up investments among tech giants such as Apple underscore the industry's dominance and longstanding commitment to physical space in the region.