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Applied Puts Up For Sale 30-Acre Santa Clara Site

September 14, 2009

Applied Materials (AMAT: 23.375 -0.83%) has quietly put up for sale a 30-acre site in Santa Clara. The property is being offered unpriced. It’s an odd time to put the property up for sale considering the fact that they’ve carried it for a long time, including the last boom cycle where the land would have likely fetched north of $50 per square foot. Nonetheless, it does signal the realization within the company that there is no material need to continue to hang onto it. It is also a broader, reinforcing signal that manufacturing in Silicon Valley doesn’t make sense anymore. Several years ago, across Bowers Ave, Equity Office put up a 16-acre site. Without any entitlements, EOP had offers north of $40 psf for that site. That deal fell apart after the developer couldn’t attract a big box home improvement store. Since then, EOP has been marketing a spec office development on the site – something which probably has 0% chance of coming to fruition in at least the next 3 years, and a 1% chance in the next 5.

The question now is who would want – and can bite off – the AMAT site. You could probably make sense out of the site for residential or multi-family development, and possibly for a data center [or football?], but that’s about it. It just doesn’t make any sense for office development- there are too few users that would need that much space and too many existing and emerging opportunities to acquire existing projects right now for 50% or less of replacement cost. And this doesn’t even include vacant land, such as Tishman’s North First Street site that is in trouble, which is sitting idle.

amat site 450x258 Applied Puts Up For Sale 30 Acre Santa Clara Site

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Categories: Commercial Development | Notable Deals
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trave September 15, 2009

Would Santa Clara allow any residential development in that part of the city? It seems a likely spot for office towers if/when the market comes back. Related to this site, has there been any movement on the old office parks that Nvidia and Yahoo bought? Both are nearby.

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