Apple is poised to close Silicon Valley's latest major office acquisition, bolstering the notion that the tech-concentrated region is returning to pre-pandemic levels of demand.
The iPhone maker is under contract to acquire the four-building Mathilda Campus at 505, 555, 599 and 605 N. Mathilda Ave. from landlord Kilroy Realty for $365 million, according to several people with knowledge of the agreement. The deal for the Sunnyvale, California, campus is expected to close before the end of September for about $550 per square foot, Kilroy executives told analysts on its earnings call in late July, without identifying the buyer.
Once finalized, the Mathilda Campus acquisition would be Apple's third major Silicon Valley real estate purchase so far this year, boosting the company's total investment to nearly $900 million within the past couple of months.
Cupertino, California-based Apple already leases three of the four Mathilda Campus buildings, or about 581,430 square feet of the roughly 663,450-square-foot complex.
The tech giant signed a deal to sublease the two properties at 505 and 555 N. Mathilda Ave. from LinkedIn in 2015. It expanded its presence at the campus in 2023 after finalizing an agreement directly with Kilroy for the entirety of the building at 605 N. Mathilda Ave.
Apple representatives did not confirm or deny the deal for the Mathilda Campus with CoStar News, earlier reported by the San Francisco Chronicle.
Kilroy executives previously told analysts that they had signed a nondisclosure agreement related to the pending sale. The Los Angeles-based real estate investment trust did not respond to CoStar News' requests for additional comment.
Hitting the gas
The latest purchase follows closely behind two other deals that Apple closed in recent weeks as it looks to solidify its long-term dominance in the region.
In late June and early July, the company shelled out nearly $520 million in a series of office acquisitions in and around its decades-long hometown.
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 three of its recently closed — or soon-to-close — acquisitions effectively transition the tech company from being the properties' sole occupant to its new owner.
"The Santa Clara Valley has been home to Apple for more than 40 years, and we're proud to continue investing in world-class facilities for our teams here," Kristina Raspe, Apple's vice president of final real estate and facilities, said in a statement to CoStar News last month after the previous deals.
The acquisitions represent 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 deals collectively add to the growing sense of optimism that global tech companies are evolving beyond the days of making significant cuts and implementing widespread lease terminations, both of which crippled the national office market as the sector scrambled to adapt to the impacts of 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 expansions.
LinkedIn, for example, recently closed a $75 million deal to purchase a 120,000-square-foot property in Sunnyvale. Walmart last month inked one of the San Francisco Bay Area's largest pandemic office deals. And Amazon has rapidly ramped up its partnership with coworking operator WeWork to add roughly 141,000 square feet to its Silicon Valley footprint.
Beyond Silicon Valley, a scattering of deals has pushed the growing sense of optimism that tech companies, after years of dormant leasing activity, are gradually returning to the national office landscape.
Leasing among tech companies across the United States rose by more than 21% through the first quarter of the year compared to the same period in 2024, according to CBRE data, a spike that accounted for just shy of 8 million square feet worth of deals. That activity represented a roughly 16.5% share of total office leasing volume nationally and builds off the momentum tech companies generated last year when leasing accounted for about 18% of all U.S. leasing.
By comparison, leasing among tech companies represented a little more than 14% of the total national leasing volume in 2023, according to CBRE, a possible signal of the industry's demand for office space.