Square Feet

Coming on the heels of its recent $150M purchase of the San Tomas Business park, NVIDIA is working to put the pieces in place to develop approximately 2,000,000 square feet of office and R&D space on the site. The park and an adjacent 11-acre piece consists of 475,000 square feet of office and R&D space spread across 10 buildings on 25 acres. The project sits directly across the street from NVIDIA’s existing headquarters campus, which it is leasing from Sobrato until 2012.

Harvest Properties, which sold the site to NVIDIA, previously had plans itself for developing 2,000,000 square feet of Class A office space. The project entailed half a dozen buildings and parking garages, the tallest of the planned buildings being six stories. As of last month, the Business Journal reported that nobody was willing to comment on the development plans, but we’ve learned that NVIDIA is in fact pursuing development of the site.

Update: This job posting on NVIDIA’s site confirms the project is in fact moving forward:

An SEC filing by NVIDIA has confirmed the purchase of approximately 475K SF of Office Space and land from Harvest Properties and Blackrock in Santa Clara by NVIDIA. We previously reported on the purchase back on February 15th.

The purchase of the park comes with a price tag of $150M, includes 25 acres, and 10 buildings on the property. It is being purchased by NVIDIA.

NVIDIA is rumored to be buying San Tomas Business Park from Harvest Properties. The 10-Building project on San Tomas Expressway right across from NVIDIA’s campus was picked up by Harvest and BlackRock Realty in late 2005 for roughly $205 per square foot.

The project encompasses 10 buildings of roughly 47K SF each spread across 24 acres. There is no confirmation of the deal or whether additional land or buildings have been rolled into the deal or when the deal is slated to close.

This deal comes about a year after NVIDIA killed negotiations to acquire a Class A highrise in downtown San Jose from Sobrato that ultimately ended up getting acquired by BEA Systems.

Microsoft has launched a $45B unsolicited bid for Yahoo! Combined, the two would be a more formidable competitor to Google, both in terms of search market share, as well as ad inventory. What will be interesting to see is that if the acquisition is indeed successful, to what extend Microsoft will embrace open-source technologies and how it integrates the two companies.

From a real estate perspective, in Silicon Valley, Microsoft may elect to keep things seperate but also has the option of utilizing Yahoo!’s 50-acre campus site in Santa Clara it purchased two years ago to combine operations. Yahoo! is currently leasing most of its Santa Clara facilities on leases which expire roughly 2-3 years from now. Given the current job cuts and overall woes with the company however, it is unlikely that they would break ground on a new campus anytime soon. Microsoft recently renegotiated for a longer term on its 450,000 SF Mountain View campus.

Also today, Kara Swisher revealed financials from Facebook based on a company-wide conference call held by Mark Zuckerberg. Some numbers are below:

• 2007 Revenues: $150 million
• 2008 Revenues: $300 to $350 million (projected)
• 2007 Headcount: 450
• 2008 Headcount: 1,000 (projected)
• 2008 Capital Expenditures: $200 million (i.e., servers)
• 2008 EBITDA: $50 million
• 2008 Cash Flow (EBITDA - CapEx): negative 150 million.

Based on the above, it would indicate that Facebook will likely be out in the market very soon looking for at least 100,000 SF of space. They are also hiring an executive chef which implies that they are emulating Google in many regards and it will likely push their requirement north of 100,000 into the 200,000-250,000 SF territory to accomodate growth simply beyond the 2008 mark.

19,983 Square Feet
3945 Freedom Circle
Santa Clara, CA 95054

• Class A
• Fully Plug N’ Play
• 40+ Offices, 40+ Workstations
• Conference, Break, Server Rooms
• Full floor identity with views
• $4.00 Full-Service

1,424 Square Feet
2700 Augustine Drive
Santa Clara, CA

• 2 Offices, Conference Room
• Open Area
• $1.75 Full Service