Walmart agrees to huge South Bay sublease deal, in lift for office market
Tech arm of retail titan rents vast Silicon Valley campus
SUNNYVALE, Calif. — Walmart’s digital division has agreed to sublease a massive tech campus in Sunnyvale, potentially providing a significant boost to the shaky Silicon Valley office market.
The modern campus could house thousands of Walmart.com employees.
Walmart.com‘s Sunnyvale office sublease was confirmed by several commercial property sources, including some with direct knowledge of the transaction who asked not to be identified because they were not authorized to discuss the deal publicly.
According to real estate sources familiar with the rental agreement, Walmart.com has agreed to sublease the entire Moffett Green tech campus, a four-building office complex totaling 719,000 square feet.
The office complex is located in northern Sunnyvale near the intersection of Crossman Avenue and Caribbean Drive. East Java Drive is also fronted by the property.
Given the size and type of office buildings, an estimated 3,600 people could work there.
Meta Platforms, the owner of the Facebook app, leased the entire campus in 2021. The massive rental deal represented a significant expansion for the tech titan at the time. Meta’s real estate priorities shifted dramatically not long after that massive leasing deal.
During the worst of the coronavirus outbreak and business closures to combat the spread of the deadly virus, isolated people and workers yearned for tech products and services that would allow them to work or socialize remotely.
However, as work-from-home mandates were relaxed, demand for such technology products and services began to decline.
As a result of the decreased demand, tech companies cut jobs globally, including in the Bay Area — staffing cuts that also significantly reduced tech companies’ need for office space. Vacancies skyrocketed as the footprints of tech companies shrank.
According to official state labor agency filings, Meta Platforms has cut 5,195 Bay Area jobs, affecting workers in Menlo Park, San Francisco, Fremont, Sunnyvale, and Burlingame. One round of Meta reductions occurred in 2022, and another this year.
The current owner of the tech campus that Walmart.com is subleasing is CommonWealth Partners. CommonWealth Partners paid $707 million to buy the office complex from real estate titan Tishman Speyer in June 2022.
That price represented a significant increase in the value of the tech campus, which Tishman Speyer purchased from NetApp for $365 million in 2021 when it was vacant.
NetApp had decided to leave the Sunnyvale campus as part of the tech company’s relocation of its headquarters to San Jose’s Santana Row mixed-use village.
The sublease agreement appears to be an expansion for Walmart.com in Sunnyvale. The sublease agreement had previously been reported on the Registry real estate news site.
According to the sources, the sublease deal was arranged by brokers with commercial real estate firms Colliers and JLL.
Walmart.com has had a presence in Sunnyvale since at least 2014, when it leased 107,000 square feet of office space on the outskirts of the downtown district.
