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Silicon Valley market improves as tech firms grow

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Silicon Valley’s commercial real estate market is improving as high-tech companies such as Google Inc. and Cisco Systems Inc. add employees, The Oakland Tribune reported.

 

Last year, more than 1 million square feet of office space was absorbed in the valley, the first net gain of that size since 2006. In the fourth quarter of 2010, about 965,000 square feet research and development space was absorbed.

 

“We’re in the fortunate position of having some icons that have a pile of cash,” said Dick Scott with Grubb & Ellis Co. “They’ve managed their growth. The valley couldn’t be healthier in many ways. The labor force has gotten less expensive and real estate is less expensive.”

 

Google, which recently announced plans to hire more than 6,000 people, has grown its Mountain View headquarters in the past four years to include more than 4 million square feet of space, according to www.MercuryNews.com. The Los Angeles Times reported last week that Google has now leased more than 100,000 square feet of office space in Venice as it continues to expand in Southern California.

 

In the fourth quarter, Apple Inc. acquired an office park formerly occupied by Hewlett-Packard in Cupertino, according to The Oakland Tribune, and PricewaterhouseCoopers LLP leased eight floors of the office space in downtown San Jose.

 

“It’s definitely taken a turn to the positive and we’re bullish on the next year,” said Mark Schmidt with CB Richard Ellis Group Inc., which compiled 2010 sales and leasing figures for Silicon Valley and the Peninsula, including San Mateo County and Palo Alto.

 

However, a more robust recovery in the commercial real estate sector could take some time as Santa Clara County deals with a 10.4 percent unemployment rate. 

 

“The good news is we’ve flipped from the negative and turned to the positive,” said Drew Arvay with Cassidy Turley BT Commercial, a real estate firm. “Unfortunately, at that pace, it will take us several years to get back to a balanced occupancy.”

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