January 23, 2009
Yahoo! (YHOO: 36.67 -2.00%) is reportedly getting ready to vacate a large chunk of Class A office space in Santa Clara, and we’ve heard its at its Mission College Campus located at 2811-2821 Mission College Blvd. The two buildings combine for a total of approximately 385,000 square feet. The effects of the layoffs Yahoo! has instituted since the 4th quarter of 2008 are beginning to have their effects. The Sunnyvale-based company signed a five year lease for one of the buildings back in 2004, and exercised its option for the other building in 2005.
What does this mean for vacancy rates in Santa Clara? For starters, Santa Clara has somewhere between 5-6M square feet of Class A office space, depending on which buildings you classify as Class A, and the current vacancy rate is somewhere around 10%. An additional 385,000 square feet would take the vacancy rate from 10% to 17% in one fell swoop. In addition, Nortel filed for bankrucpty protection earlier this month which could mean even more space being brought online in Santa Clara once it figures out what to do with itself. It is likely that in one quarter alone, the vacancy rate in Santa Clara for Class A space could double from 10% to 20% if this space hits the market by the end of the quarter.
It’s a good time to be a tenant, and it’s only going to get better.
- As Santa Clara Class A Vacancy Soars EOP Drops Prices at Mission Towers I
- It’s Official: Yahoo! Vacating Mission College Campus
- Nortel Cuts 3200 More; Santa Clara Vacancy At Risk
- Yahoo! To Cut 700 More
- A Guide to Office Building Classifications; Class A, Class B, Class C